Consumer confidence falls back as Christmas bills come in
THE loss of high-profile jobs and the arrival of credit-card bills that were run up before Christmas have dampened the confidence of consumers.
The Consumer Sentiment Index slipped back in February, after hitting a four-month high in the previous month.
The closure of music retailer HMV and the lay-offs at B&Q rattled consumers. Meanwhile, public-sector cuts preyed on the minds of shoppers and general concerns about household finances also pushed the mood of consumers down.
The index, which is produced by KBC Bank and the Economic and Social Research Institute think tank, fell to 59.4 in February, down from 64.2 in January.
David Fitzsimons of Retail Excellence said: "There has been a noticeable decrease in consumer activity reported by our member companies in 2013 to date and we are deeply concerned about the future viability of some retail operators."
He said the latest Consumer Sentiment Index showed that consumers were still very cautious about spending, adding: "There continues to be significant pressures on household finances and it doesn't look like these pressures are going to ease any time soon."
The €30.6bn promissory-note deal was announced halfway through the survey period. It appears to have had some positive impact but came too late to have a major influence, according to KBC Bank economist Austin Hughes.
He stressed that household finances were on a knife edge, commenting: "The Irish consumer remains in a difficult place. Pressure on household finances is significant and there is considerable uncertainty about the current trajectory of the Irish economy."
He said the dip in confidence in February, after an uplift the previous month, was down to fears about jobs and Christmas bills hitting households.
And uncertainty that the worst is finally over for the housing market has also darkened the mood of consumers.
"As is usually the case when post-Christmas sales end and New Year bills arrive, consumers also become more negative about the buying climate in February," Mr Hughes said.