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Consumer sentiment down in March after seven year high

The chief economist at KBC Bank Ireland said it likely reflects a normal ebb and flow in the data and we shouldn’t be too worried.

Image: cash register image via Shutterstock

IRISH CONSUMER SENTIMENT dropped slightly in March for the first time in four months but experts say we shouldn’t be worried.

The KBC Bank/ESRI Consumer Sentiment Index slipped to 83.1 in March from the near seven year high of 85.5 posted in February.

Chief economist at KBC Bank Ireland, Autin Hughes, said that in spite of last month’s setback, the sense is that confidence is still set on a modestly improving trend.

“However, the March results emphasise that the mood of Irish consumers is still fragile,” he said.

He commented that it “likely reflects the normal ebb and flow that might be expected in these data in the absence of an overwhelming force pushing sentiment in one or other direction”.

The broad trend in sentiment is still positive and Hughes said “the vicious cycle of fear and falls in activity and employment appears to have been broken”.

Results indicate that spending is being concentrated on ‘big ticket’ items such as cars, electrical equipment and property-related outlays with offsetting restraints on spending in other areas.

Only nine per cent of people reported an improvement in their household finances while 54 per cent said they were worse. 45 per cent of those surveyed see unemployment declining in the coming year compared to 26 per cent who expect joblessness to rise.

Hughes said the data from March shows that consumers need repeated reassurances that the Irish economy is moving onto a recovery footing and any indications to the contrary tend to affect their outlook.

Read: Irish consumers are happier than they have been in seven years>

Read: Irish consumers in ‘notably more positive mood’ last month>

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