Irish consumer sentiment falls to four-month low

Fall mirrors declines in similar measures of consumer well-being in US and UK

 

Consumer sentiment fell in April to its lowest level since December as households remained cautious about Ireland’s economic prospects and their own finances.

The fall mirrors declines in similar measures of consumer well-being in the US and UK although sentiment improved modestly in the euro area.

The latest KBC Bank/Economic and Social Research Institute consumer sentiment index fell to 104 in April down from 108 in March and a record 110.4 in January.

The weakest element of the April sentiment survey was that relating to job prospects, KBC economist Austin Hughes said.

“ This may owe something to some layoff announcements by high profile Irish companies that stirred concerns about job security,” he said.

“ More generally, consumers may feel the Irish jobs market is still not delivering any marked recovery in pay growth,” he added.

Mr Hughes said there is little sense that consumers are sensing any great benefit to their household finances from negative Irish inflation at present.

“This may partly reflect the moderate pace of income growth or it could be that they are more focussed on areas such as housing or energy where costs are rising well above the overall inflation rate,” he said.

The most comparable indicator for the US, the consumer sentiment index prepared by the University of Michigan dipped to its lowest level since January.

Although its compilers emphasised that current readings remain consistent with solid gains in US consumer spending, they did indicate that concerns about a threatened trade or tariff war had influenced some of the more negative responses.

UK consumer sentiment also slipped in April as a weaker trajectory for the UK economy allied to on-going political uncertainty around Brexit.

In contrast, a slight pull-back in views on economic prospect by euro area consumers was more than offset by expectations of healthier household finances resulting in a clear if modest increase in confidence.