Latest Consumer Sentiment Index

The overall KBC Ireland/ESRI Consumer Sentiment Index was weaker in February at 59.4. This compares to a figure of 64.6 in January and at its all time low in July 2008 when the index was at 39.6.

 

Commenting on the results David Duffy, ESRI, said

 

·          “The results for consumer sentiment indicate a weakening in February, following an improvement in January.”

·          “Some weakening of consumer sentiment was anticipated at the time of the improvement in January. In the past consumers have become more positive about purchasing major household items every January, reflecting, at least in part, the winter sales, followed by a more subdued figure in February. This pattern has continued, contributing to the moderation in consumer sentiment.”

·          “Although the decline in sentiment reflects in part a post-sales effect, it is noticeable that the decline is also driven by consumers becoming more negative in their perception of the outlook for the labour market and the economy.

 

 

 In addition, Austin Hughes, KBC Ireland, noted:

 

·          “The surprise in the February survey is that consumer sentiment seems to have held up reasonably well. A poorer buying climate was responsible for about three quarters of the drop in the Index last month. It was inevitable that consumers spending intentions would weaken once the sales ended and bills related to Christmas spending began to arrive. However, the buying climate was still stronger in February than in the latter stages of 2009. So, the sharp decline in Irish consumer spending may be coming to an end although the survey doesn’t point towards any prospect of a dramatic rebound anytime soon.”

·          “The February consumer sentiment reading at 59.4 is still well below the 14 year survey average of 91.8. So, Irish consumers are still fairly downbeat about the broad economic outlook and their personal finances. However, the underlying trend seems to be improving marginally. The February results suggest consumers expect conditions will remain tough in 2010 but not quite as terrible as they were in 2009. It is very obvious that consumers do not expect the Irish economy to be strong or to recover in a straight line but the message from the February report implies they still expect economic conditions to get better rather than worse in the coming year.”