Consumer sentiment weakened marginally in August, but continued to remain fairly stable. The KBC Ireland/ESRI consumer sentiment index eased to 48.7 last month from the July figure of 49.5.
KCB's chief economist Austin Hughes said that against the backdrop of widespread worries about the outlook for public spending, the recent spate of layoffs and concerns about NAMA and An Bord Snip, the resilience of the August data is both surprising and encouraging.
He says the data may at least tentatively hint that the country is past the worst in terms of the collapse in consumer spending even if there is little prospect of a sharp rebound.
However, he also stated that Irish consumers remain very nervous and they realise that there is little prospect of an early return to the good times. Consumers expect the Irish economy to remain weak, the jobs market to remain tough and their personal finances to remain under pressure.
Today's index reveals that the most negative element of the survey relates to the unemployment situation, with some high profile job losses during the month, including the cuts at Intel and Element Six.
The prospect of hefty cutbacks in public spending and the threat of new and higher taxes saw some weakening in consumers' assessment of their household finances. However, the decline was modest and reflects a significant influence from further price cuts and heavy price discounting in the summer sales.
