Thursday 18 July 2019

Confidence at 21-month low as consumers' nerves fray

'The index noted that the net worth of the average Irish household is still 13pc below 2007 levels.' (Stock image)
'The index noted that the net worth of the average Irish household is still 13pc below 2007 levels.' (Stock image)
Dearbhail McDonald

Dearbhail McDonald

Consumer confidence has dropped to a 21-month low amid Brexit fears and other financial concerns.

The six-point drop to 96.4 from August's reading of 102.4 is also the largest monthly decline in four years.

The latest KBC Bank/ESRI consumer sentiment index cites worries over a downgrade on household finances, rising costs and "a sense of remoteness" from the reported boom times.

KBC Bank Ireland's chief economist Austin Hughes said "Brexit nerves" are likely the key to the pullback in expectations for the economy.

He added that the survey suggests consumers are "increasingly nervous rather than extremely negative".

"There is little question that the September sentiment survey reflects a clear drop in confidence among Irish consumers," said Mr Hughes.

"We think it reflects concerns about Brexit, sharp increases in energy and housing costs and expectations of very limited gains in the upcoming Budget.

"These factors combined to prompt a significant downgrade in views on household finances as well as on the broader economic outlook."

The fall in Irish consumer sentiment in September saw material declines in four of the five main components of the index, including consumers' personal financial situation a year ago and expectations for their financial situation 12 months ahead.

The index noted that the net worth of the average Irish household is still 13pc below 2007 levels.

The one element to post a monthly gain was expectations for the jobs market. However, the improvement on August was fractional.

The sharp drop in Irish consumer sentiment in September coincided with mixed readings elsewhere in the world, notably in the US, where sentiment rose to the highest in 14 years.

Irish Independent

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