Consumer sentiment falls for third consecutive month

Irish consumer sentiment fell in August, for the third month in a row, according to the latest IIB/ESRI consumer sentiment index. The index fell to 73.3 last month from 78.3 the previous month and is now at its lowest level since it began six-and-a-half years ago.

"That the August reading fell below the previous low, which was seen in the immediate aftermath of the terrorist attacks last year, may reflect increasing concern that the Irish economy could be set for a protracted period of sub-par growth, with all that implies for employment prospects and personal finances," IIB/ESRI said.

It added the slippage in sentiment comes at the same time as "broad stability in corresponding US data" adding that the relatively weaker trend in Irish consumer sentiment "may reflect a particularly poor domestic economic news flow in recent months". The previous all-time low for the index, 76.3, was registered in October 2001.

IIB/ESRI noted concerns about the Irish jobs market were a key driver of the fall in Irish consumer sentiment in August.

"In addition, the drip feed of announcements of 'various adjustments' to public spending, coupled with higher hospital charges and university registration fees, may have impressed upon consumers that what might have seemed abstract and remote when economists described 'a deteriorating position in Ireland's public finances' has become an immediate threat to their pockets," IIB/ESRI notes.