Consumer sentiment was fairly steady in August, with the slight decrease reflecting weaker buying intentions as the summer sales end and the back to school expenses kick in.
The KBC Bank Ireland/ESRI consumer sentiment index fell to 66.8 from 68.2 in July. But the bank noted that the underlying trend from the three month moving average improved to 68.5 from 66.7.
''These results represent no marked changed in the mood of Irish consumers of late. While the sentiment index suggests Irish consumers are still cautious, they seem a little less fearful recently than through most of the crisis period,'' the bank added.
KCB Bank Ireland's chief economist Austin Hughes said that the weakening in the buying climate is not surprising, especially since it hit a three year high in July.
''We think spending related to the fine weather, significant discounting in summer sales and the arrival of the new 132 motor registration plate all contributed to strong spending in July,'' the economist said.
''However, the August sentiment data suggest the underlying trend in Irish consumer spending remains weak. With summer sales over and back to school demands on household budgets looming large for many families, it is not surprising that consumers signalled a decline in their appetite for big ticket purchases in August,'' he added.
Mr Hughes said the fact that four times as many consumers expect their household financial position to weaken in the next 12 months as expect it to improve suggests that the average Irish consumer is braced for another difficult budget in October.
He said the mood of consumers for the rest of the year will be significantly influenced by the ''design, details and possibly even the delivery of the upcoming Budget''.
''A Budget that encourages the view that a clear turn in the economy entailing improving household finances is in sight could boost confidence further. A Budget that delivers unexpectedly large pain could have an outsized negative effect on sentiment and spending,'' the economist added.
