Consumer sentiment falls slightly on October figure

CONSUMER SENTIMENT fell in November but stayed above the average for the last year, according to data published yesterday.

The KBC Bank Ireland-ESRI Consumer Sentiment survey weakened to 60.1 in November, compared to a 16-month high of 63.7 in October. The average figure for the past 12 months was 55.4.

The current levels of the monthly index remain below the long-term average of the series of 88, indicating Irish consumers are conscious of the enormity of the problems facing the economy and how that might impact their personal finances.

The index of consumer expectations, which looks at how consumers perceive their future financial situation and economic expectations, fell from 51.3 in October to 46.6 last month.

However, the index of current economic conditions, which reflects how consumers feel about their financial circumstances compared to 12 months ago, remained high at 80.1. The average for the past year was 74.3, and October saw the index go as high as 82.2.

Cormac O’Sullivan of the ESRI said consumer morale was being affected by the ongoing financial crisis. “The surprise increase in the October figure has been reversed somewhat in November, although the index remains above the depressed levels seen over the past year,” he said.

He noted a fall last month in consumer expectations for the economy over the next 12 months. “This continues a pattern that has emerged over the past number of years of increased negativity in the run-up to budget day,” he said.

Austin Hughes of KBC Ireland was not overly negative about the overall weakening in sentiment.

“What is encouraging is that the pullback was relatively limited,” he said. “This hints that consumers have become a little less gloomy of late even though the sentiment index is still telling us they remain cash strapped and cautious.

“These results suggest Irish consumers may tolerate a budget package that imposes further pain provided it also points in the direction of an eventual recovery.”