Consumers lost confidence in the recovery at the very time they were due to vote in the general election
CONSUMERS lost confidence in the recovery last month, at the very time they were due to vote in the general election.
The consumer sentiment fell back from a 15-year high.
People who responded to the survey lowered their expectations about how an economic recovery would improve their personal finances.
This reflects the results of the general election last month when the Fine Gael/Labour coalition did not get sufficient TD numbers to return to government on their own.
The KBC Bank Ireland/ESRI Consumer Sentiment Index dropped to 105.8 from 108.6 in January.
Despite the fall it is still higher than its long-term average.
The February reading is the second-highest reading in a decade, reflecting the fast growth of the economy.
The weakening of the index in February was mainly down to consumers being more circumspect about their personal finances.
Chief economist with KBC Bank Austin Hughes said the slowdown in the sentiment survey was due to questions about how much of the recovery will translate into stronger financial circumstances for the average consumers.
However, he pointed out that seasonal factors may have a part to play in February’s softening.
The fall-off may also be due to increased uncertainty both in terms of international and domestic prospects.
International economies have been hit by a slowdown in China, the collapse in oil prices and fears over effects of deflation, where prices keep falling.
Mr Hughes said: “Similar confidence readings weakened in the US and fell sharply in the euro area last month. Consumers around the world continue to be disappointed by the absence of economic conditions and policies that are robust enough to deliver clear and broadly felt improvements in their living standards.”
He added: It seems to owe more to lower expectations as to how much the recovery will translate into stronger financial circumstances for the average Irish consumer.
"We would not regard the drop in sentiment as particularly surprising or alarming," he added.
He said the increased uncertainty over personal finances could have been prompted by both worries over global economic developments and the general election.