Consumers’ jitters see sentiment drop to lowest level in four years

CONSUMER sentiment last month fell to its lowest level since November 2014 amid growing concerns of a no-deal Brexit.

In addition, the nurses’ strikes and related debates about pay and conditions in the public sector may have affected confidence.

The KBC Bank/ESRI consumer sentiment index fell to 86.5 in February from 98.8 in January, and well below the 2018 average of 102.5.

The 12.3 point drop in the index last month was the largest monthly fall since December 2012, with the sentiment index falling to its lowest level since November 2014.

KBC Ireland chief economist Austin Hughes said while some pull-back in sentiment in February was not entirely surprising, the scale of decline was unexpected.

“The scale of the deterioration in February seems unusually large and there could be some corrective rebound in the next month or two,” Mr Hughes said.

“We don’t believe that the outlook for the Irish economy or the prospects of Irish consumers deteriorated dramatically last month,” he added.

“Consequently, we don’t envisage any sharp pull-back in spending.”

Economic and Social Research Institute (ESRI) economist Philip Economides said that while the index is mostly optimistic, particularly with respect to households’ own financial circumstances, 48pc of respondents believe the domestic economic situation will worsen over the next 12 months.