Irish consumer sentiment weakened slightly in August, as consumers reined in their spending plans and continued to report only limited gains in their personal finances, a new survey indicates.
According to the KBC Bank/ESRI consumer-sentiment index, sentiment declined to 102.9 in August, down from a 17-month high of 105.1 in July, as consumers said they have yet to feel the full impact of the recovery economy. Underwhelmed by the impact the recovery has had on their personal financial circumstances to date, most do not see any marked improvement in their household spending power in the next 12 months.
Austin Hughes, economist with KBC Bank Ireland, said that the slight drop in sentiment isn’t “entirely surprising”, given the focus on back-to-school costs and other pressures on household finances.
“With the majority of consumers not reporting any improvement in their spending power, it is not surprising that the survey readings are buffeted this way by even small changes in the pattern of household outlays,” he said.
Conor O’Toole of the ESRI echoed this, noting that consumers are experiencing a “potential disconnect between the economic recovery and many households’ day-to-day experiences”.
“With regard to their personal financial situation, Irish households reported a small deterioration relative to 12 months ago and a somewhat larger weakening for the coming 12 months.”
Nonetheless, the broad message of the data is that Irish consumers remain positive in relation to the prospects for the Irish economy and the outlook for jobs.
“ The absence of a widely feared collapse in the UK economy or radical changes in US economic policy together with the emerging view that Brexit could prove to be a long, drawn-out process may also have played some part in this reassessment,” the analysis says.