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Choppy Irish consumer sentiment edges slightly lower in October

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Choppy Irish consumer sentiment edges slightly lower in October

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DUBLIN (Reuters) – Irish consumer sentiment edged slightly lower in October as a pattern of ‘one and a half steps forward, one step back’ continued in the European Union’s fastest growing economy, the authors of the monthly survey said on Tuesday. While Ireland’s economy is on course to be the best performer in the EU for the fourth consecutive year, morale has been choppy over the past 18 months as the recovery only filters slowly into people’s pockets and living costs rise. The KBC Bank Ireland/ESRI Consumer Sentiment Index fell to 104.8 in October from 105.8 in September, remaining broadly where it has all year and shy of a 15-year high of 108.6 in January 2016 before neighbouring Britain’s vote to leave the EU. “Irish consumer sentiment continued the pattern of ‘one and a half steps forward, one step back’ that has characterised the monthly sentiment survey readings for the past year or so,” said KBC Bank Ireland Chief Economist Austin Hughes. “As income growth is still modest for most households and significant uncertainty persists about future prospects, it remains the case that caution rather than confidence is the key influence on Irish consumer behaviour at present.” Hughes said the “reasonably positive” trend was consistent with an economy experiencing an ongoing if uneven upswing and that any increase in household spending in the final months of 2017 was likely to be healthy rather than huge as a result. The stuttering Irish sentiment contrasts with results across the broader euro zone – where the recovery was initially slower to take hold but has seen morale rise for five successive months to reach its highest level since the start of 2001. “The contrast with the US and Euro area readings highlights the lack of a self-reinforcing feel-good’ factor in the Irish economy that would drive confidence consistently higher,” Hughes said.

(Reporting by Padraic Halpin; Editing by Andrew Heavens)
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