Ireland: Consumer sentiment in July climbs to the highest in four months
The KBC Bank Ireland/ESRI consumer sentiment index climbed to 107.6 points in July, up from June’s 13-month low of 102.1 points. The index, which moved further above the critical 100-point threshold, reflects stronger overall sentiment and marks a persistence in the “see-saw pattern” of weaker consumer confidence in one month followed by stronger confidence among consumers in the next month in a rapidly changing and uncertain economic setting owing to Brexit. Improved weather conditions and the prospect of summer holidays were reported to have also influenced the more positive mood of Irish consumers.
July’s upturn in consumer confidence reflected a higher reading in every sub-component of the index compared to the previous month. Consumers showed a greater propensity to make major purchases and was the sub-component that recorded the biggest improvement, followed closely by their more upbeat assessment of current economic conditions. Consumers’ views on their personal financial situation in the past 12 months was also more positive, as was their perception on their personal financial situation in the next 12 months. While the index of consumer expectations, general economic outlook, and outlook for unemployment remained entrenched in negative territory, they showed improvement from previous month’s readings.
Reflecting on the rise in consumer confidence in July, KBC Bank Ireland noted that:
“While the July reading is reflective of a generally positive outlook on the part of Irish consumers, we would emphasise that this is coloured by a significant element of caution and a particular sensitivity to bad news in what is still an uncertain economic environment.