Consumer confidence in surprise fall against backdrop of Government formation uncertainty
THERE has been a surprise fall in consumer confidence, with the uncertainty over the formation of a Government cited as one of the main reasons.
The risk of Britain leaving the European Union has also rattled householders.
Consumers are also worried about the prospects for the economy, and international economic uncertainty.
The index that measures consumer confidence weakened in March as a “fear factor” gripped householders.
The KBC Bank Ireland/ESRI consumer sentiment index fell from 105.8 to 100.6 in February.
This was the largest monthly decline since October 2014 and brought the index to its lowest level in six months.
And the three-month moving average of the sentiment series fell for the first time since September, confirming a significant change in the mood of Irish consumers last month.
The scale of the pullback in sentiment in March again underlines how tentative the improvement in these circumstances is for many consumers.
KBC Bank economist Austin Hughes aid the March survey still shows generally confident about their economic circumstances but got more worried in March.
Mr Hughes said: “The darker mood of Irish consumers last month likely reflects the prospects of a prolonged period of domestic political uncertainty.”
The weakest part of the Irish survey in March was in relation to the economic outlook for the next twelve months.
Mr Hughes said an area of unease stems from greater coverage of the looming ‘Brexit ‘ vote in the UK and the heightened focus on worst-case scenario risks to the Irish economy.
The KBC economist added: “The March sentiment survey saw a relatively modest mark-down of consumers views on their own household finances.”
He said it remains the case that marginally more Irish consumers hold positive rather than negative views of their personal financial circumstances.