Advance in consumer confidence stalls

The steady improvement in consumer confidence stalled last month, according to the latest survey of sentiment in the Irish Times/TNS mrbi monthly Pulse survey, which was taken as petrol prices started to rise last month, writes Cliff Taylor, Economics Editor

It showed that 34 per cent of respondents expected conditions to improve in the months ahead, unchanged from the previous month, ending eight months of steady improvement.

The survey indicated that consumer confidence remained steady at the higher level reached in April. With the percentage expecting conditions to improve remaining steady, there was a small decline of two percentage points to 18 per cent in the percentage expecting conditions to deteriorate.

There was a small increase in the percentage expecting conditions to remain the same to 44 per cent.

The telephone survey was conducted between May 4th and May 27th.

Respondents were asked: "Thinking about the year ahead, do you think employment levels and the Irish economy in general are set to improve, weaker or remain the same."

Consumer confidence has improved steadily since last summer, when the percentage expecting conditions to improve fell as low as 7 per cent and 70 per cent anticipated a weakening.

The improved economic climate has translated into greater confidence and a sustained pick-up in consumer sentiment.

The stall in the improving trend in May may reflect the impact of rising oil prices and the first rise in petrol prices, which fed through at the pumps last month.

Since then, crude oil prices have risen further. Analysts will closely monitor the impact of this on both consumer and business sentiment in the months ahead. Any sign of a fall-off in confidence could lead to a downgrading of economic growth forecasts.

Perhaps reflecting these doubts about the international economic climate, the percentage of "chief income earners" expecting conditions to improve declined from 39 per cent in April to 37 per cent in May, with a rise in the category anticipating that conditions would "remain the same."

There was a similar decline among the "working" category from 35 per cent to 32 per cent, again translating into a rise in those expecting conditions to remain the same.

The other notable category showing a decline was males, where the percentage expecting a pick-up was cut from 40 per cent to 37 per cent, again translating into a rise in the "stay the same" category.,

The figures show no marked difference regionally in consumer confidence levels. Looking at the traditional ABC social categories, the AB group remains the most optimistic, with 44 per cent expecting an improvement in conditions compared to 12 per cent anticipating a weakening.