Consumers reluctant to spend amid job fears
Published 01/02/2011 | 11:25
The impact of the budget and post-Christmas bills risks further denting people`s willingness to spend in the coming months, experts warned today.
A survey on consumer sentiment also found the vast majority of people are worried about the continued jobs crisis and how much they pay for goods.
Some 70pc of those questioned over the economy fear unemployment will get worse this year.
Experts who compiled data for the monthly Consumer Sentiment Index warned the slight increase during January is more than likely down to the traditional early year sales.
Austin Hughes, chief economist at KBC Ireland, which carried out the survey with the research body the ESRI, said it would be wrong to expect a turnaround in sentiment and spending based on business over the last few weeks.
"Irish consumer confidence has weakened considerably in recent months. So, the January figures say that consumers feel they have already discounted a lot of bad news," he said.
And he warned: "While these data suggest Irish consumer sentiment is not in freefall, there must be some risk that when post-Christmas bills and post-budget pay packets are examined, sentiment could decline further in the next couple of months."
The KBC/ESRI Consumer Sentiment Index increased to 48.7 in January.
David Duffy, ESRI economist, added: "The improvement in consumers' perceptions of the current environment reflects the view that January was a good time to purchase major items,"
"Historically this component has improved every January, reflecting, at least in part, the winter sales, followed by a more subdued figure in February. We expect this pattern to continue and as a result some moderation might be anticipated next month."