Consumer sentiment steady in March - KBC/ESRI

Monday 08 April 2013 16.27
Concerns persist among householders about the property tax and the impact of the last budget
Concerns persist among householders about the property tax and the impact of the last budget

Irish consumer sentiment held broadly steady in March as more positive views about the general economic environment were offset by increased concerns over household finances.

The KBC Bank Ireland/ESRI consumer sentiment index recorded a very marginal increase last month, from 59.4 to 60.

In broad terms, it would seem that any boost to confidence from the promissory note deal was offset by worries about the looming property tax and public sector pay cuts, the report concluded.

It also points out that the increase in March is too slight to be seen as signalling anything other than a broadly unchanged degree of confidence among Irish consumers.

"The three month moving average of the series normally provides a clearer indication of the underlying trend. However, the jump in this aggregate from 57.8 in February to 61.2 last month largely reflects the influence of an unusually weak December reading falling out of the three month measure between February and March.

"As a result, we don't think this signals any clear improvement in trend of late," Austin Hughes, chief economist with KBC Bank concludes.

The relatively flat Irish sentiment reading in March was broadly consistent with the behaviour of similar indicators for many other countries last month.

There were no big shifts in the global environment through the March survey period in either the US or in the euro area.

Mr Hughes pointed out that the survey period saw a number of encouraging developments on the 'macro' front, but the improvement in the survey on that front was relatively modest.

"There is no sense from these data that consumers feel that Irish economic activity is moving onto a notably stronger trajectory or that the prospective easing in the debt burden represents a dramatic change in this country's financial fortunes," he said.

The report pointed to continued concerns among consumers about their household finances with the impending local property tax and the impact of Budget 2013 continuing to be felt.