AN UNCERTAIN economic climate and anticipated cuts in the next Budget contributed to a drop in consumer confidence this month, according to KBC Bank Ireland and the ESRI.
Consumer sentiment weakened slightly in September, dropping from 55.8 in August to 53.3 – its lowest level since February. Concern over jobs increased this month, with more people worried about job security.
Meanwhile, consumer sentiment across Europe has dropped to its lowest level in two years and US confidence is down to its lowest in two and a half years.
KBC says that that confidence among Irish consumers may not have suffered as sharp a fall as others in Europe or the US because consumers here already had a “fairly downbeat view” of the general economic outlook. Some Irish households may also have taken comfort in the “less threatening future trajectory for interest rates and oil prices”, while others may find it comforting that Ireland is not alone in suffering economic problems.
The bank says that Irish consumers may believe a global financial problem will be dealt with more quickly and less painfully than a national one.
However, it says overall that the results of the latest consumer sentiment index are largely in line with its views that Irish consumers are increasingly nervous about the upcoming Budget and that the scale of adjustment may be higher than previously anticipated.
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