Consumer sentiment fell back in February, possibly relating to a fall-off in purchase plans after the January sales. The overall IIB Bank/ESRI consumer sentiment index declined to 82 in February, compared to 85.7 in January. The figure is still well above the 62.3 recorded in February last year, however.

The overall index is composed of two sub-indices, one of which measures current conditions and the other expectations for the future. The fall-off in February this year was due entirely to a change in consumer perceptions of their current situation.

The index in this area fell sharply to 89 from 99.7 in January, due largely to consumers becoming more negative about making major purchases.

The decline in this area is normally seen in February, commented Mr David Duffy, economist at the ESRI.

He said the underlying figures, however, suggested "a cautious, broadly based improvement in sentiment across a number of the other index components". In particular, the expectations index, which measures consumer perception for the next 12 months, rose to 77.2 in February from 76.3 in January.

The figures suggest that consumers will be cautious in their spending, according to Mr Austin Hughes, chief economist at IIB Bank. The underlying trend in sentiment is improving, "but at a fairly modest pace", he added.