Ireland: Consumer sentiment improves in May
June 5, 2018
The KBC Bank Ireland/ESRI consumer sentiment index climbed to 106.7 points in May, up from 104.0 points in April, recovering two-thirds of the drop in the previous month. This marks a continuity in the “see-saw pattern” of brighter consumer confidence in one month followed by weaker confidence in the next month in a rapidly changing and uncertain economic setting owing to Brexit.
The upturn in consumer confidence in May reflected stronger readings in three out of the five sub-components of the index compared to April. Improved household spending plans was the strongest sub-component of the index, despite higher uncertainty regarding the general economic outlook and prospects for household finances. Consumers were also more optimistic about employment compared to the previous month but the improvement was marginal. Conversely, consumers’ expectations on the Irish economy and their household finances over the next 12 months were weaker in May relative to April.
Reflecting on the upturn in consumer confidence in April, KBC Bank Ireland noted that:
“With more positive than negative responses to all of the main elements of the survey, the May reading suggests the mood of Irish consumers remains one of guarded optimism. However, as the May index is lower than that seen in either January or March, the survey continues to hint at a recovery that from the perspective of the average consumer is patchy rather than progressive.”