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No 'feel-good factor' as cautious Irish consumers feeling gloomier

Instead of consumers spending more, it’s more a matter of more consumers spending according to the KBC/ESRI sentiment index.

THE SENTIMENT AMONG Irish consumers fell last month, continuing a see-saw pattern reflecting uncertainty about a range of threats to the economy, according to the latest index from KBC Bank and the ESRI.

The fall in the consumer sentiment index from July to August also reflected the “lack of any sharp improvement in the financial circumstances of the typical Irish consumer of late,” KBC’s Austin Hughes said.

This drop in how Irish consumers are feeling is mirrored in the US and Europe, with consumer sentiment on a downward trend since the turn of the year.

Rather than one particular factor causing sentiment to fall, KBC said these changes are directed by “broad-reaching forces influencing the general mood of Irish consumers rather than very specific issues”, Hughes said.

unnamed KBC / ESRI KBC / ESRI / ESRI

Nevertheless, it does highlight that Brexit – particularly the volume and tone of commentary recently – could have played a significant role here with warnings sounded about how Ireland is particularly vulnerable to a no-deal Brexit.

And, despite the positive general outlook and growth in the Irish economy, this is not translating into “more broadly-based gains” in spending power for households. 

unnamed (1) KBC / ESRI KBC / ESRI / ESRI

High reported growth figures come in contrast to the spending power of the Irish consumer, and this “may be colouring views on the prospective performance of the Irish economy”, Hughes said.

The reason for dropping consumer confidence could also be time-related, as the costs of going back to school and seasonal increases in energy bills become important again in August. 

“The Irish economic upswing at present is primarily driven by strong increases in numbers living and working here that translates into a story more of Irish consumers rather than the average Irish consumer being able and willing to spend more,” he added.

Consequently, a distinct absence of ‘feel-good’ remains a notable feature of recent consumer sentiment readings.

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    Mute SC
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    Sep 6th 2018, 6:39 AM

    Why is GDP discussed in the article? GDP has been growing steadily for years and wages have not followed. Your productivity has nothing to do with how much money you get, just how much your boss gets. The general trend across all of Europe for the last 30 years has been for companies to make more profits but not increase pay. With the cost of living soaring and wages stagnating how could anyone feel more positive?

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    Mute SC
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    Sep 6th 2018, 6:40 AM

    @SC: Sorry I mean growth in terms of GDP!

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    Mute Ger Murphy
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    Sep 6th 2018, 7:42 AM

    @SC: I would have thought the reasons for poor sentiment were obvious. (1) Fear of the impact of brexit. (2) Uncertainty of impact of US economic policies. (3) High cost of housing; rents are higher than the pre crash levels.

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    Mute Carl
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    Sep 6th 2018, 7:33 AM

    Can’t exactly be splashing the cash when we’re payinf extortionate rent and saving for a deposit, can we?

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    Mute Irish Political GIF
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    Sep 6th 2018, 7:19 AM

    For me it’s housing. Not spending because I’m saving. I’m not spending my life funding a landlord, no thanks

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    Mute Patrick McCann
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    Sep 7th 2018, 11:52 PM

    @Irish Political GIF: me neither, i’ll fook off to another country before i’d pay extortionate rent for a substandard place.

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    Mute Michael Garvey
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    Sep 6th 2018, 6:15 AM

    Seem its true.. you need money to feel good..

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    Mute Michael Kavanagh
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    Sep 6th 2018, 7:02 AM

    @Michael Garvey:
    You need enough – a lot of people are on the verge of that and know full well that it would not take much to be tipped to the wrong side of that.

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    Mute Gaius Gracchus
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    Sep 6th 2018, 7:52 AM

    I was about to buy a 16-pack of 4-ply quilted bog roll the other day and suddenly I stopped and thought; “What’s wrong with you man?! Remember Brexit!’ so I put it back and went for the 4-pack of 2-ply recycled roll instead.

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    Mute wattsed
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    Sep 6th 2018, 9:00 AM

    @Gaius Gracchus: Were there any ill effects in your endeavour to minimize flushing your money down the toilet ?

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    Mute Earl of Daventry
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    Sep 6th 2018, 1:27 PM

    @Gaius Gracchus: All well and good until the finger pops through the 2 ply

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    Mute Earl of Daventry
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    Sep 6th 2018, 1:27 PM

    I thought the boom was back no? Bleedin’ gouls.

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    Mute Patrick McCann
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    Sep 7th 2018, 11:54 PM

    @Earl of Daventry: don’t believe that BS spin from those parasites

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