Consumers anxious but not ‘apocalyptic’ about Brexit

Sentiment made ‘modest’ gain in March after a torrid February, finds ESRI

 Austin Hughes, chief economist KBC Bank Ireland: consumers conscious of some modest improvements in their household finances

Austin Hughes, chief economist KBC Bank Ireland: consumers conscious of some modest improvements in their household finances

 

Consumer sentiment made a “modest” gain in March, recovering about half of the large drop suffered in February, according to the latest snapshot from KBC Bank Ireland and the Economic and Social Research Institute (ESRI).

The uptick “doesn’t signal any dramatic improvement in either the current circumstances of future prospects of the average consumer,” said Austin Hughes, chief economist at KBC Bank Ireland.

“However, it does suggest that if Irish consumers are anxious, the mood has not become apocalyptic as the Brexit deadline comes closer.”

Since the beginning of 2018, monthly changes in sentiment have been larger than usual, which Mr Hughes said was primarily due to Brexit.

Irish recovery

While consumers are aware of the risks to the Irish recovery posed by global economic uncertainty, they are also conscious of some modest improvements in their household finances, he added.

One element of the index – the buying climate – fell in March, with the weaker spending plans among consumers “likely reflecting the still heightened uncertainty about what might happen next in relation to Brexit”.

The pick-up in Irish consumer sentiment last month coincided with similar slight gains in the US and the euro zone and an unchanged reading for the UK.