Water charges blunt confidence

The majority of consumers are still failing to see the positive effects of improved economic performance as pressure on household finances continues to act as a drag on confidence levels.

Consumer sentiment remained largely steady in November falling marginally from 85.5 to 85.3 as consumers weighed the opposing factors of continued financial pressures against an improving economy last month.

With the index unchanged, the large fall in sentiment in October appears to be more than a blip and may represent a correction of earlier over-confidence rather than a sea-change in consumer sentiment, according to the KBC/ESRI consumer sentiment index.

The report also refers to the focus on water charges as a touchstone for widespread concerns that the macro-economic upturn is not delivering an expected rise in living standards.

Many consumers appear to harbour conflicting views on the wider economic outlook and their own finances. More than 50% of respondents anticipate an improvement in economic conditions in the coming year against 20% that envisage a deterioration.

In contrast however, 46% of consumers indicated their financial situation had worsened in the past year compared to 11% whose personal finances had improved. Pessimism looks set to continue in this regard with four in 10 expecting a further deterioration as opposed to 17% who anticipate an improvement.

Consumers are slightly more optimistic on to the jobs market in November, however, following a string of job announcements.