Ireland: Consumer sentiment gains some lost ground in January
February 7, 2019
The KBC Bank Ireland/ESRI consumer sentiment index improved at the outset of the year, rising to 98.8 in January from 96.5 in December. However, the index remains below the critical 100-point threshold that separates optimism from pessimism among consumers. January marked the fifth consecutive month that the index has been in pessimistic territory following the departure from the nearly one-year long “see-saw pattern” of stronger consumer confidence in one month followed by weaker confidence in the next month in September.
Consumers held an improved outlook on unemployment and their personal financial situation 12 months ago, owing to upbeat job announcements and post-Christmas sales. The willingness to make big-item purchases also rose in the month. An upturn in these sub-components more than offset less favorable views on the general economic outlook amid elevated concerns surrounding the impact of Brexit on the Irish economy, with the increasing possibility that the UK could exit without a deal. Thus, unsurprisingly, the weakest component of the index was consumers’ general economic outlook, which continued on a downward trend. Moreover, consumers were less optimistic about their personal finances over the next year.
Author: Nihad Ahmed, Economist