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Friday 1 December 2023 Dublin: -2°C
Sasko Lazarov File photo of shoppers on Grafton Street, Dublin.

Sharp fall in consumer sentiment in September

Experts said speculation around the budget and potential cuts to social welfare and health contributed to the decline.

CONSUMER SENTIMENT FELL sharply last month to its weakest level since February, according to figures from KBC Bank and the ESRI.

The overall consumer sentiment index declined from an almost five year high of 70 in August to 60.2 in September.

Experts said some of the decrease was due to “intense speculation” about the budget and potential cuts to social welfare and health spending.

All components of the index were weaker last month bu the ESRI said the main declines were in consumers’ view of the outlook for their household finances over the next 12 months and their view of the economic outlook for the next year.

The index of consumer expectations also declined from 61 in August this year to just 48.6 last month.

Commenting on the results, Austin Highes of KBC Bank said while the figures were disappointing, they are not “entirely surprising” as the improvement in confidence recently was tentative and fragile.

“It has been built largely on a gradual easing in concerns in relation to the Irish economy and household spending power rather than any dramatically positive news”. he said. “Unfortunately, the September survey suggests the fear factor has returned as consumers worry about the possible impact of another severe budget on already strained household spending power.”

Hughes said the data would suggest that the government should attempt, in so far as possible, to reduce uncertainty around the budget and spending cuts.

“In highlighting the fragility of sentiment and spending power, the September results also argue that the upcoming budget should seek the minimum adjustment consistent with Ireland’s adherence to the EU/IMF adjustment programme,” he added.

Read: September car sales down 10pc on last year>

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