Irish consumer sentiment improved in August, according to a new report.
The KBC Bank Ireland/ESRI consumer sentiment index increased to 102.7 last month, a 3.1-point monthly gain which reversed most of the 3.8-point drop seen in July.
The August reading is above the historic average of the sentiment series but only matches the average of the past 12 months.
The improvement in views on economic prospects in August largely reflected an easing in negative responses to this question (from 25% to 15% of those surveyed) rather than any dramatic recovery in positive responses (which rose from 41% to 45%).
While confidence measures for the US and the Euro area both posted modest declines for the third month in a row in August, the comparable UK survey reported a limited correction of a portion of the sharp fall seen in the immediate aftermath of the UK Brexit vote.
Commenting on the results Daniel Foley, ESRI, said: “Consumer sentiment appears to have recovered somewhat after a fall in confidence following the Brexit referendum result,” said the ESRI’s Daniel Foley.
“The results for the main index suggest that consumer optimism has moved back in line with its longer term trend following a brief slowdown in the last few months.”
“The improvement in consumers' expectations this month is being driven mainly by rising sentiment in relation to the general economic climate and future employment prospects.
“The component relating to future unemployment increased by 9.9 index points this month reversing some of the loss observed last month.”
“The results in relation to the index of current economic conditions were not as optimistic with the index decreasing marginally by 1.9 index points.
“The buying climate improved slightly this month compared to last month with an increase of 1.9 index points. There was, however a worsening perception of consumer’s financial situation compared to 12 months ago”.
In addition, Austin Hughes, KBC Bank Ireland, noted: “The recovery of most of the ground lost in July in the wake of the UK Brexit vote is encouraging but not entirely surprising.
“The immediate economic fall-out from Brexit has been notably less traumatic than some consumers might have feared and with most indicators during the survey period pointing to the continuing health of the Irish economy, some rebound in sentiment from the July reading is understandable."
“While the August sentiment reading suggests Irish consumers remain broadly positive in their thinking on the general economic outlook and their household finances, this survey and comparable confidence measures for a range of other countries also hint at a significant measure of unease on the part of consumers worldwide at present.
“This owes something to increased uncertainty in light of unexpected events such as the outcome of the Brexit vote.
“It also seems to reflect a sense of disappointment at the limited gains the average consumer has experienced from the improvement in economic conditions in recent years.”