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Dublin: 12°C Monday 8 August 2022

Latest consumer survey suggests fears over economy easing

KBC/ESRI consumer sentiment index rose slightly in April for the fourth month in a row.

Image: Dominic Lipinski/PA Wire

CONSUMER SENTIMENT improved slightly in April for the fourth month in a row from 60.6 in March to 62.5 last month, according to the latest KBC Bank Ireland/ESRI sentiment index.

This is the first time since January 2007 that the index has increased for four consecutive months.

KNC says that the latest figures suggest a relatively modest improvement in Irish consumer sentiment, but that consumers remain concerned about their household finances and are cautious about the Irish economy.

Overall, the extreme nervousness about the Irish economy reflected in consumer sentiment towards the end of last year appears to have eased slightly, though KBC says it doesn’t really reflect a notably more positive view of the economic situation.

KBC’s chief economist Austin Hughes says that consumers haven’t suddenly seen “particularly bright economic conditions ahead”, but that their worst fears about the economy are beginning to fade.

“The improvement in sentiment in April doesn’t seem to reflect a markedly more optimistic outlook among Irish consumers, just a slight further easing in nervousness,” said Hughes.

“So, there is little to suggest that there will be any sharp increase in household spending. That said, we may see some easing in the tendency to postpone major spending decisions if there is reduced anxiety about the future. So, barring further major shocks, consumer spending could begin to stabilise in the months ahead.”

ESRI economist David Duffy said that concern over future employment remains:

Most of the components of the index increased in April, with a notably more positive perception by consumers of the current buying climate and the outlook for the labour market. However, one out of two consumers remained concerned that unemployment will rise over the next 12 months.

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