Ireland: Consumer sentiment improves in November
December 6, 2018
The KBC Bank Ireland/ESRI consumer sentiment index rose in November but remained in pessimistic territory. The index climbed to 96.5 in the month, up from 93.5 in October, moving closer to the critical 100-point threshold that separates optimism from pessimism. November marked the third consecutive month that the index has been in pessimistic territory after the departure from the nearly one-year long “see-saw pattern” of stronger consumer confidence in one month followed by weaker confidence among consumers in the next month in September.
While uncertainty lingers in relation to the U.K.’s exit from the EU and the implications for the Irish economy, greater optimism over a draft Brexit agreement, modest declines in fuel costs and the rate of increase in property prices, and a potential small boost to households’ incomes from next year’s budget, likely drove the upturn. Households were more optimistic about their personal financial situation over the next 12 months and were also slightly less pessimistic about their economic situation in the past year. Consequently, consumers were more upbeat about making major purchases. On the other hand, consumers were more downbeat about the unemployment situation and prospects for the general economic situation.
Commenting on November’s reading, KBC Ireland noted:
“Our sense is that the pick-up in the Irish sentiment survey in November does not signal a marked change in thinking on the part of consumers here. Instead, it likely reflects a ‘pause’ following a sharp downgrading of prospects for personal finances as well as the economy at large in recent months.”