Ireland: Consumer sentiment improves in March
March 31, 2017
In March, the KBC Bank Ireland/ESRI Consumer Sentiment Index ticked up from 100.7 points in February to 101.9 points. The increase observed in the surveyed month reflects consumers’ more positive views on their household finances. Nevertheless, there is little evidence to suggest growing optimism among Irish consumers as the indicator fails to gather momentum. The higher reading seen in March could easily be erased in future months once the first details of Brexit negotiations emerge or as international uncertainty keeps increasing.
March’s improvement was driven by an improvement in most components of the index. Consumers grew more optimistic about their personal financial situation in the past year and in the 12 months ahead. Likewise, they viewed their current conditions and economic outlook in a more positive light. On the contrary, unemployment fears grew somewhat as an industrial dispute in the public sector and high profile job losses have dampened the employment outlook. Willingness to purchase big ticket items also dropped and could be a reflection of how uncertainty is impacting purchasing decisions.
Commenting on the trend of the consumer confidence survey, KBC noted that, “the considerable difficulty that the average Irish consumer is currently having in evaluating their economic and financial prospects is clearly suggested by the fact that the March reading marks the 11th time out of the past 12 months in which the sentiment index has moved in the opposite direction to the previous month.”