Survey finds consumers cautious

Fear of rising job losses and mixed economic news has left Irish shoppers cautious about spending money, according to the results of a survey published yesterday.

The IIB Bank/Economic and Social Research Institute (ESRI) Consumer Sentiment Index for May shows that consumers are less confident about the future than they have been. The index, based on the results of interviews with 1,100 people, was stable from month to month, giving a reading of 97.4 in May compared with 97.3 in April.

IIB economist, Austin Hughes, said the data suggested that Irish consumers were taking a wait and see approach.

"Conflicting signals on the economy seem to be restraining confidence and may limit spending growth in coming months, " Mr Hughes said yesterday.

ESRI economist, David Duffy, said that concerns about the future offset consumers' positive perceptions about the current economic situation.

The current conditions element of the index was up to 109.6 in May from 105.2 in April. However, the forward looking component was down to 89.2 from 91.9.

Mr Duffy said that consumers' concerns for the future stemmed from fears that jobless numbers would grow.

"Nearly 50 per cent of consumers expect the unemployment rate to rise over the next 12 months," he explained.

Mr Hughes acknowledged that announcements of job losses in high profile companies earlier this month contributed to people's pessimism.

Earlier this month, Waterford Wedgewood announced that it was going to cut 1,800 jobs.

At the same time, IBM revealed plans for a shake up that will also see employment cut in the Republic. Also, Magna Donnelly Electronics in Naas, Co Kildare announced 245 job losses.

However, Mr Hughes also noted that generally stable consumer sentiment here was better than other countries, indicating that the economic situation here is better than elsewhere.