Irish consumers still ‘feel remote’ from recovery narrative

Irish consumers still feel “somewhat remote” from reports of a strong domestic recovery, according to the latest KBC Bank Ireland/ESRI consumer sentiment survey.

The survey’s headline index fell marginally to 100.6 in September from 101.1 the previous month.

This probably reflects the difficulty the average consumer has in making sense of seemingly contradictory recent signals both in relation to economic prospects generally and their own financial circumstances, the report’s authors said.

“The September sentiment reading should still be regarded as fairly healthy but it also emphasises on-going concerns facing the average Irish consumer,” they said.

The survey suggests consumers remain wary about the scale and sustainability of Ireland’s economic recovery.

Uncertainty about the global economy and ongoing pressure on household finances were also said to be weighing on confidence levels.

However, the report noted that the marginal change in sentiment in Ireland came against a backdrop of much sharper declines elsewhere.

In the US, the most comparable measure, prepared by the University of Michigan, fell from 91.9 in August to 87.2 in September-its weakest reading in eleven months.

"Concerns about weakness in stock markets and renewed worries about the health of the global economy now centred on fears of a sharp slowdown in China were the main driver of the poorer September sentiment reading in the US," the survey said.

In Europe, similar considerations about the world economy compounded by the migrant crisis also prompted a drop in confidence.

In contrast, to their US counterparts, euro area consumers were marginally more positive about their personal finances possibly reflecting less immediate direct concern about stock market difficulties, the report’s authors said.

The increasingly positive outlook for the Irish economy did not, however, translate into a corresponding rise in sentiment in relation to jobs, despite the continuing decline in the State’s headline rate of unemployment, which fell to 9.4 per cent this week.

“Perhaps this reflects a view that a less certain global environment may lead to a more conservative approach to job creation. It might also be argued that this result is consistent with some signs of an easing in the pace of decline in joblessness of late.”

A more downbeat assessment of personal finances by Irish consumers may simply reflect a continuing gap between strong economic indicators and what for many continues to be a struggle to make ends meet, the report said.