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Consumer mood less gloomy but nervous

Wednesday, October 31 12:30:35

There was a marginal improvement in the mood of Ireland's hard-pressed consumers in October but the impending Budget and strains on family finances meant that confidence is still lacking, according to the latest KBC Bank Ireland/ESRI Consumer Sentiment Index.

The index edged from 60.2 in September to 60.9 compared to a reading in October of last year of 63.7.

But the decline of the 3-month moving average continued, from 66.0 to 63.7.

Austin Hughes, KBC Bank Ireland said the index shows that Irish consumers remain nervous.

"Although it's encouraging that consumer sentiment rose marginally, the October reading still suggests that Irish consumers have become a good deal more nervous in the past couple of months. The fragile nature of sentiment at present means that while Budget 2013 will be painful it must also be designed and presented in a way that consumers see as providing some prospect of an improvement in domestic economic conditions during the coming year," he said.

"The details of the October survey show a small improvement in views in relation to the Irish economic outlook that were broadly offset by continuing concerns about consumers own personal finances. Until consumers feel more confident about their own spending power, any improvement in the Irish economy will remain narrowly based and unbalanced," he added.

Kevin Timoney of the ESRI said that there were obvious declines in some areas of consumer confidence.

"Three components of the Consumer Sentiment index were weaker in October. Declines continued in consumers' view of the outlook for their household finances over the next 12 months, in their view on their financial situation compared to 12 months ago, and in their expectations of unemployment over the coming 12 months."