Irish consumer sentiment improved for a second successive month in December, represents the largest two month gain in almost five years (since January 2015), research shows.
According to the recently published KBC Bank Irish Consumer Sentiment Index this is largely reflects the reduced near term risk that the UK might crash out of the EU.
A relatively modest increase in the consumer sentiment index last month might suggest Irish consumers regard Brexit risks as diminished and somewhat delayed but far from disappeared, the report showed.
That said, the details of the December sentiment survey also point towards somewhat more positive views on income prospects and purchasing plans that may translate into stronger consumer spending over the turn of the year.
Reduced Brexit Concerns
The sense that reduced Brexit concerns were central to the improvement in Irish consumer sentiment last month is supported by the contrast between a large increase in UK consumer confidence in December, a relatively flat reading in the comparable metric for the US and a decline in consumer confidence in the Euro area, the survey indicated.
The outperformance of UK and Irish consumer confidence measures in late 2019 suggests a key ‘local’ concern has eased, at least for now.
The question is whether that relief will prove sufficient to spark a material step-up in spending on either side of the Irish sea in early 2020.
2020 Vision
Almost half of those surveyed said that they see the year ahead as not being materially different to the one just ended.
According to the research, almost one in three expect an improvement but a significant one in five envisage a worsening of their circumstances in the coming year.
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