Irish consumer sentiment held steady in May as consumers caught up between the implications of a delayed Brexit while an improving jobs market may be adding to household spending power.
This is according to the latest KBC Bank Ireland Consumer Sentiment Index, which suggested that, since the Brexit threat was delayed rather than dispelled, there was no marked jump in confidence.
Rock & A Hard Place
The KBC bank consumer sentiment index increased to 89.9 in May from 88.6 in April, however, the bank said that this was too small an increase to suggest any significant change in the mood of Irish consumers last month.
This 1.3 point increase is the lowest change in the past five months and the second lowest since the beginning of 2018.
However, the survey for May did indicate an improvement in the Irish jobs market that fed through to marginally more positive expectations for household spending power.
The report said that these elements countered ‘a more negative reading on current income trends and a related caution in regard to spending plans’.
Emerald Isle's Brexit Blues
Regarding Brexit, the survey found that Brexit is now weighing more on consumer sentiment in Ireland than in the UK.
It said that 69% of consumers expect Brexit to raise the prices of the goods and services they buy, while just 4% anticipate lower prices.
As many as 30% of consumers feel Brexit could raise the cost of housing for them over fears that people could leave the UK for Ireland.
It says that this reflects fears about price increases resulting from tariffs and disruptions to the supply chains.
“We don’t see any specific domestic reason why the mood of Irish consumers would have lagged behind other countries in May,” Austin Hughes, Chief Economist, KBC Bank Ireland, said.
“Our sense is that even though the survey period saw Brexit further delayed, concerns about economic consequences of the UK's looming exit from the EU continue to cast a greater shadow over Irish consumer sentiment than on similar metrics for other countries including the UK.”
© 2019 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click sign-up to subscribe to Checkout.