Friday 23 March 2018

Consumer confidence down in July over recession fears

Colm Kelpie

Colm Kelpie

Consumer sentiment weakened last month as fears about the stability of the global economy offset the boost from the summer sales.

Shoppers remain worried about the financial outlook and are using the sales to shop for discounts on necessities instead of splashing out on luxuries, according to KBC Bank.

July's consumer sentiment survey found the consistent gloomy news about the world's economy had sparked fears of tougher times ahead.

Austin Hughes, economist with KBC Ireland, which compiled the report with the Economic and Social Research Institute (ESRI), said there was some improvement in the buying climate.

But he added: "I think what you have now among consumers is a kind of guerrilla war, that they can't or won't pay full price.

"So you find that they are coming out to an extent during the sales, but we don't have any sort of conspicuous consumption at the moment.

"We've more the sensible sales purchase where people are buying the things that they need, rather than in the good old days, the things that they wanted."

The KBC Bank Ireland/ESRI Consumer Sentiment Index weakened marginally to 55.9 last month, compared to the June reading of 56.3, as concerns mounted about the economic outlook and hikes in mortgage repayments.

The survey found that even though people may not understand the complexities of the crisis facing the eurozone or the controversy over the raising of the US debt ceiling, the gloomy news weighed heavily on their minds and sparked fears about the future.

But while confidence is low, consumer sentiment remains well above the all-time low seen in July 2008.

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