‘Wary’ consumers hint at voters’ dissatisfied mood
Irish consumers remain “wary” about the future despite feeling better about Brexit, which may explain the views of voters in the final week of the election campaign, according to a major survey.
The latest in the regular series of the KBC Bank Ireland surveys of 1,000 consumers found that they were feeling happier last month as the immediate fears that Britain would crash out of the EU eased considerably.
However, the latest reading of consumer sentiment was still lower than in January 2019 and there was little evidence of the buoyant feelgood factor for household finances that the economic growth figures might indicate.
That suggests the pickup in consumer sentiment in January reflected more of “a relief rally” to the lifting of the crash-out Brexit threat than anything “that might suggest a broadly based improvement is now being felt”, according to the survey.
“While it is the case that Brexit fears have eased there is still a feeling of uncertainty and a lack of a feelgood which may be setting their views in terms of the election,” said the bank’s chief economist Austin Hughes.
The survey suggests that consumers “who reported they were making ends meet” were significantly uncertain about the future.
“The improvement in Irish consumer sentiment in January was more modest than that seen in the UK but contrasted with largely unchanged readings in comparable confidence metrics for the US and euro area,” the survey found.
“It should be noted that the January 2020 readings of consumer confidence for the UK and euro area were slightly below their latest five-year average levels while that of the US was modestly higher but the shortfall in the current Irish sentiment reading was notably more pronounced,” it found.
Meanwhile, the CSO said unemployment rose last month to 4.8% from 4.7% in December, with youth unemployment rising to 11.8% from 11.1%.
Andrew Webb, chief economist at Grant Thornton Ireland, said the rise was “worrisome” and may suggest that declines in unemployment were over.
