Consumers gloomy but sentiment might improve
Published 09/03/2011 | 05:00
CONSUMERS remained gloomy last month, but there were tentative signs that their mood may be stabilising.
Consumer sentiment was dampened by the arrival of post-Christmas bills, and the end of sales in shops, according to the latest KBC Bank/ESRI consumer sentiment index.
But experts warned that shoppers and households face even more significant tests over the coming months with higher mortgage interest rates on the cards.
Last month's consumer sentiment survey found people remain gloomy but also that they had already taken into account looming bad news.
Analysts suggested the adjustments of households to difficult circumstances may not be quite as traumatic as feared.
Austin Hughes, economist with KBC Bank, which compiled the report with the Economic and Social Research Institute, said the slight and surprising rise in sentiment figures hinted that consumers had prepared themselves for a lot of bad news.
"That said, February survey results hint at some resilience in sentiment which might suggest spending may not be quite as weak as feared," he added.
In February, the KBC/ESRI Consumer Sentiment Index rose for the third month out of four to 50.3.
The report said consumers were noticing an easing in the unemployment crisis.
Two of the survey's five elements saw a decline last month. People's buying powers worsened -- as expected -- after the end of the post-Christmas sales and the arrival of the Christmas bills.
ESRI economist David Duffy said: "The underlying message from the analysis is that consumers remain cautious in the present circumstances."
The data was obtained from telephone interviews in the first two weeks of February with around 800 completed questionnaires.