Irish consumer sentiment falls to fourteen month low in May

Irish consumer confidence fell to a fourteen month low in May, as job market concerns, uncertainty over ‘Brexit’ and a feeling that the economic recovery has yet to impact household finances, played on people’s minds.

According to the KBC Bank Ireland/ESRI Consumer Sentiment Index for May 2016, while there was no dramatic deterioration in circumstances, the survey nonetheless points to a clear downgrading of outlook for jobs and household finances. The index fell to 98.1 in May from 102.7 in April, the weakest since March 2015. The decline in Irish consumer sentiment in May was broadly based, with all five components of the index posting lower readings than in April.

Austin Hughes, chief ecnomist with KBC Bank, notes that the result for May was the third monthly decline in the past four months.

“While the trend in sentiment in recent months clearly points towards greater nervousness of late, it doesn’t signal any dramatic deterioration in the current circumstances of the typical Irish household,” he said, adding that the figures suggest that Irish consumers remain “broadly positive if a little less exuberant in their views of Irish economic prospects”.

Mr Hughes says that it's likely that a couple of high profile job losses gave rise to some concerns in relation to the health of the Irish jobs market. In late April for example, it was reported that up to 400 jobs could be lost at Intel's Irish operations, while there have also been high profile industrial relations disputes at the company behind the Luas and Tesco.

Daniel Foley of the ESRI notes that the longer term trend for the main indices continues to point upward suggesting that confidence is still broadly positive.

“However, all three month moving averages have marginally declined in recent months, indicating a dip in the short term trend suggesting that consumers are becoming much more cautious in their outlook and confidence may be starting to wane.”