IIB Bank/ESRI Consumer Sentiment Index, June 2004

June 25, 2004

News

25/06/2004



IIB Bank/ESRI Consumer Sentiment Index, June 2004

Press Release Embargo: Friday 25th, June 2004 at 15.00 p.m.

IIB Bank/ESRI Consumer Sentiment Index, June 2004

Consumer Sentiment slightly lower in June The overall IIB Bank/ESRI Consumer Sentiment Index weakened marginally to 90.1 in June. This compares to a figure of 91.1 in May.

Commenting on the results David Duffy, ESRI, said

  • “The results for June show a marginal decline in consumer sentiment. However, the 3-month moving average improved from 89.6 to 90.6. Thus, consumer sentiment can be viewed as having remained broadly stable.”
  • The marginal decline reflects consumer’s becoming more negative about their financial situation, both the current situation and expectations for their personal financial situation over the next 12 months. Thus, the index of current economic conditions declined to 95.8 in June from 99.3 in May.”
  • In contrast, the forward-looking sub-index, the expectations index, rose to 86.3 in June, from 85.5 in May. The driver behind this improvement is a more positive perception by consumers of the outlook for the labour market.”

In addition, Austin Hughes, IIB Bank, noted:

  • The marginal fall in Consumer sentiment in June is probably an overdue correction after a record ten consecutive months of improving consumer sentiment. However, it also underlines that an improving ‘macro’ climate does not translate into much stronger spending power overnight. We think it could take some time for Irish consumers to notice a marked improvement in their incomes. As a result we don’t think Irish economic growth will move to an explosive trajectory anytime in the near future.
  • The poorer sentiment reading in June may also have been influenced by a number of specific factors. Sharp increase in petrol prices and fears of an eventual rise in interest rates could have prompted some downgrading of personal financial situations. Uncertainty about the implications of European and local elections results for Government policy may also have encouraged a ‘feel bad factor’.