Friday, August 30 12:14:16
The latest survey of consumer mood showed some stability in August but failed to lift as the Summer sales ended and back to school costs kicked in.
The overall KBC Ireland/ESRI Consumer Sentiment Index decreased to 66.8 in August, from 68.2 in July. The 3-month moving average increased from 66.7 to 68.5.
Austin Hughes, KBC Bank Ireland, noted that the drop in the sentiment index in August was driven by a weakening in buying intentions.
"With summer sales over and back to school commitments looming large for many families, this is to be expected. However, it was slightly surprising that consumers were a little less negative about recent developments affecting their household finances. This suggests that low inflation and signs of stabilisation in the housing market may be further easing the 'feel bad' that has been so entrenched in recent years."
''We think spending related to the fine weather, significant discounting in summer sales and the arrival of the new 132 motor registration plate all contributed to strong spending in July,'' the economist said.
''However, the August sentiment data suggest the underlying trend in Irish consumer spending remains weak. With summer sales over and back to school demands on household budgets looming large for many families, it is not surprising that consumers signalled a decline in their appetite for big ticket purchases in August,'' he added.
Mr Hughes said the fact that four times as many consumers expect their household financial position to weaken in the next 12 months as expect it to improve suggests that the average Irish consumer is braced for another difficult budget in October.
He said the mood of consumers for the rest of the year will be significantly influenced by the ''design, details and possibly even the delivery of the upcoming Budget".