Consumer sentiment down on fears over budget, economy and finances

Consumer sentiment fell sharply in September as fears about the economy, the budget and personal finances weighed on consumers.

The KBC Bank Ireland/ESRI consumer sentiment index fell from 70 in August to 60.2 last month.

The decline reversed most of the improvement seen through 2012 with the sentiment index now back at its weakest level since last February.

“For most of the past nine months, the improvement in sentiment reflected a gradually broadening view that the worst might be over. The September survey results suggest consumers are no longer sure that is the case,” KBC chief economist Austin Hughes said.

Intense media speculation on a range of potentially painful budget adjustments together with other negative economic developments unnerved consumers, he added.

Retail Excellence Ireland, Ireland’s largest industry trade body, also said on-going budget speculation was to blame for the sharp deterioration in consumer sentiment. The deterioration in consumer sentiment “is no surprise considering the significant amount of budget speculation leading to consumer fear and reduced spending”, said REI’s David Fitzsimons.