Ireland: Consumer sentiment reaches over one-year high in June as fears of hard Brexit diminished
July 11, 2017
In June, the KBC Bank Ireland/ESRI Consumer Sentiment Index jumped from 100.5 points in May to 105.0 points. The result in June marks the best reading since February 2016 and was affected by both domestic and external factors.
June’s reading reflected an almost across-the-board improvement in all five main components of the index. Ireland’s economic outlook improved notably following the outcome of the UK elections which diminished fears of a hard Brexit. For the first time since June 2016, a majority of consumers believe the economy will strengthen in the year ahead. Given a more optimistic economic outlook, unemployment fears diminished notably. Culmination of public sector pay talks and continuing stream of new job announcements were listed as reason behind the notable rise in the employment outlook. Consumers’ assessments of the personal finances improved notably and is an indication of the country’s low-inflationary environment.
Commenting on whether June marks the start of higher consumer sentiment trajectory, KBC noted that, “in the absence of dramatically positive news on the Irish economy or a significant improvement in household finances, we don’t think the sentiment index is now set on a notably stronger trajectory. Indeed, there is a significant chance of at least a partial reversal of last month’s gain in the months ahead”.