Consumer confidence plummeting, survey finds

CONSUMER confidence fell to a record low last month as increases in food, fuel and borrowing took their toll.

The latest IIB Bank/ESRI consumer sentiment index dropped to 42.2 in June, the lowest level since the survey began in 1996, from 48.8 a month earlier.

IIB Bank chief economist, Austin Hughes said the drop in consumer sentiment was mirrored in similarly weak readings in most other countries.

“Right around the globe common concerns including surging food and energy prices and a greater risk of job loss are uniting consumers in a mood of fear and gloom.

“A worrying aspect of the Irish sentiment data is a particularly negative outlook for household finances in the coming year. Clearly, increases in food, fuel and borrowing bills are taking their toll.

“Fears of a tough budget in December may also be hitting confidence.

“So, Irish consumers expect things to get worse rather than better in the months ahead,” he said.

Mr Hughes added that the June survey results suggest a pronounced ‘feel-bad factor’ is now entrenched in Ireland.

“This makes Irish consumers altogether more responsive to bad news as worries about the general economy, job security and diminishing spending power dominate.”

The index of current economic conditions was down to 65.7 from 72.9 in the previous month, compared to a level of 96.6 in June last year.

The forward-looking expectations index was also lower at 26.4, down from 32.6 in May, and well below the 74.1 recorded in June 2007.