Dip in consumer sentiment blamed on post-Christmas blues

A sharp fall-off in consumer sentiment last month was blamed on post-Christmas blues.

The latest KBC Bank/ESRI Consumer Sentiment Index fell to 96.1 in February, down from January’s nine-year high of 101.1.

"Most years, the sentiment index tends to soften once post-Christmas festivities end and related bills arrive," chief economist with KBC Ireland Austin Hughes said.

However, he said the uneven nature of Irish consumer sentiment also reflected global economic uncertainty and ongoing pressures on household finances.

The latest survey suggests the underlying trend in Irish consumer sentiment remains positive, with the February reading more than ten points higher than a year ago and the second highest in nine years.

Four of the five main elements of the Irish consumer sentiment survey weakened on a monthly basis in February.

The exception was the jobs component which posted its strongest reading since January 2007. In February, there was a number of high-profile new job announcements and those on the Live Register fell for a 22nd consecutive month.

"Our sense is that the weaker February assessment of the outlook for household finances is primarily a reflection of the fact that Irish consumers are not experiencing a straight line recovery where each month represents a clear and progressive improvement in their circumstances," Mr Hughes said.

The fall-off in sentiment here last month was at odds with similar euro area indicators, which showed a third monthly improvement in February.

The weakening in Irish sentiment mirrored a similar drop in the comparable US sentiment measure which declined from an 11-year peak posted in January.

“While the latter may owe something to continuing weakness in wage growth, some analysts are also attributing the disappointing February result to particularly severe weather of late in parts of the US,” Mr Hughes said.