Consumer confidence continues modest rise, but 'significant' economic clouds remain

Consumer spending expected to “bloom, rather than boom, this summer”

Consumer confidence hit a two-year high this month, according to a survey, but there remain economic clouds on the horizon.

Housing and rising living costs are being viewed as the main threats to a post-Covid economic recovery, but consumer confidence is still high, according to a survey.

“Irish consumers see brighter days ahead, but some significant economic clouds,” said KBC Bank Ireland chief economist Austin Hughes.

The bank’s latest consumer mood monitor showed enough of a sentiment uptick to push confidence to a two-year high in June.

It is also the first five-month consecutive run of improving confidence seen since 2007.

But, while the reopening of much of society contributed to less nervousness about the outlook for the economy, the improvement in jobs market sentiment was less than expected.

The outlook for household finances also remained negative, with that being attributed to talk of the phased reduction in government Covid income supports and suggestions of the possible need for future tax increases, rising housing costs, and inflation concerns.

Mr Hughes said a limited rise in consumer purchasing plans suggests consumer spending will “bloom, rather than boom, this summer”.

Overall, however, Mr Hughes said the latest survey suggests Irish consumers are becoming less concerned about their current circumstances as well as  less fearful about the future.