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Irish consumers not so happy, but thanks for asking

Latest customer sentiment survey down last month after hitting a seven-year high in July.

Image: Shopping trolley via Shutterstock

CONSUMERS AREN’T EXPECTING any sudden boost to their household budgets and are still uncertain about how well the Irish economy is doing.

But people are positive overall about their personal finances, despite taking a more pessimistic view than they did the month before.

The latest consumer sentiment survey from KBC Bank Ireland and the Economic and Social Research Institute (ESRI) reported a drop in August from the seven-year highs recorded in July.

The index dropped to 87.1, down from 89.4 the previous month but still well up on the June figure of 81.1.

It measures how consumers see their future economic prospects and how they rate their current financial situations.

Stronger economic not hitting home

KBC Bank Ireland chief economist Austin Hughes said the monthly drop was not surprising as most consumers were yet to see improvements in the Irish economy impact on their household budgets.

From their perspective, any improvement remains tentative and somewhat distant,” he said.

“This means sentiment readings are likely to remain ‘choppy’ until there is a broadly based improvement in household spending power.”

The survey found 52% of consumers expected the Irish economy to improve over the next 12 months compared to 18% who thought it would get worse.

The figures were also slightly down on last month’s results, which were the strongest since late 2006.

A worse climate

Surveyed households were also less positive about the current buying climate, although the ESRI said the change was probably because of summer sales coming to an end.

Hughes said there was no sense from the figures that consumers expected a “giveaway” budget to be handed down next month.

“While there was some improvement in consumers’ views on the outlook for their household finances compared to July, roughly twice as many expect a deterioration in their spending power in the year ahead as foresee an improvement,” he said.

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About the author:

Peter Bodkin  / Editor, Fora

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