Irish consumer sentiment held steady in October as strong ‘macro’ trends continued to offset increasing concerns around household finances, research shows.
According to the latest KBC Bank Ireland consumer sentiment index, while the October reading is broadly encouraging and suggests Irish consumer sentiment is reasonably healthy at present, the dominant mood appears to be one of continuing caution born out of uncertainty and experience rather than runaway confidence that would reflect a view that the worst is behind us.
"The October survey suggests Irish consumers are very much in a wait and see mode at the moment.
"Encouraging news on the economy and jobs suggests a much better outcome than might have been envisaged when the pandemic first struck but this is tempered by ongoing concerns around personal finances that hints at some element of disconnect between a booming Irish economy and a bothered Irish consumer at present," commented Austin Hughes, author of the KBC Bank Ireland consumer sentiment index.
The Irish consumer sentiment survey for October was largely completed before the presentation of Budget 2022 or the publication of consumer and property price inflation data 14 October, KBC Bank said.
However, the main elements of Budget 22 were signalled well in advance while a rising inflation trend has become established of late, it noted.
So, there is little to suggest these recent developments will markedly alter the mood of Irish consumers.
The broad signal from the survey is consistent with the message from the consumer spending element of recent National Accounts data for the second quarter of 2021.
Although household spending showed a dramatic 12.6% quarter-on-quarter improvement, it remains about 5% below its early 2019 level and about twice that below its pre-pandemic trend.
"While we expect strong increases in consumer spending both this year and next, this should be seen as a recovery-in-progress rather than a boom," Hughes added.