Fear for jobs as consumer confidence nears five-year low

CONSUMER confidence has fallen to its lowest level in four-and-a-half years.

The latest IIB/ESRI consumer sentiment index (CSI) dropped to 62.7 last month, the lowest since its 60.9 reading in July 2003 — which was a record low for the gauge.

Just one-in-12 consumers expect the jobs market to improve this year, compared with one-in-four a year earlier, according to the report.

Four out of five consumers meanwhile expect unemployment to rise this year, twice as many as a year earlier.

IIB chief economist Austin Hughes said the central message is that Irish consumers ended last year in a nervous frame of mind.

“They are extremely nervous about the risk of job loss and may be set to adjust their spending accordingly.

“Some high profile redundancy announcements during the survey period as well as widespread fears about job losses in construction mean consumers are worried about job security in the coming year.”

Mr Hughes added that consumers are more fearful about the general economic outlook than their own financial situation.

“There is a clear sense of foreboding about what 2008 may hold for the Irish economy,” he said.

At 62.7 in December the overall CSI was down from a figure of 63.1 in November and well below the 89.8 figure for December 2006.

David Duffy of the ESRI said that although the CSI fell only marginally in December it is too soon to say if this indicates that the decline in sentiment is coming to an end.

“The results show that consumers’ economic expectations stabilised in December. The forward-looking sub-index remained steady at 49.3 in December, from 49.2 in November, but significantly below the 87.7 for December 2006.”