Economy takes toll on consumer sentiment

Consumer sentiment slipped considerably in December, with many people still concerned by budget measures, personal finances and the economy’s future.

The KBC Bank Ireland-ESRI consumer sentiment index dropped from 63.8 to 49.8 last month. This 14-point fall is the largest monthly change since the index was established.

The index lies far below the 2012 average of 61.0, while the three-month moving average declined from 61.6 in November to 58.1 in December.

The Index of Consumer Expectations measures consumers’ perceptions of their future financial situation. This index fell to an 11-month low, falling from 51.2 in November to 38.8 in December.

The Index of Current Economic Conditions is based on how consumers feel about their financial circumstance compared to 12 months earlier. This index fell sharply from 82.4 in November to 66.1 last month, the lowest it has been since October 2008.

Retail Excellence Ireland chief executive David Fitzsimons said the latest consumer sentiment index shows the scheduling of the budget in December had a detrimental effect on confidence and retail sales.

“This drop follows a pattern from previous years of weakening consumer sentiment in December after each year’s budget is delivered.