Consumer sentiment fell in August following strong growth in July, according to the latest KBC Bank / ESRI index.
The index fell to 87.1 last month, according to the bank’s survey, compared to 89.4 in July.
That is still considerably higher than the figure in June, however, when the index stood at 81.1.
KBC Bank’s chief economist Austin Hughes said consumer sentiment was moving in a broadly positive direction, however consumers were still unsure about the economy and how any improvement may benefit them.
This confusion was evident in an increase in positive and negative answers to most of the survey’s questions, he said, which may also indicate growing differences in individual’s circumstances.
Mr Hughes also noted that the latest dip tracks an ongoing trend in the survey, where monthly changes tend to move in the opposite direction to the previous month, creating a “choppy” picture for the year so far.
However he noted that the index’s moving three month average was now at its highest point since February 2007, while the August 2013 figure was well ahead of the one recorded in the same month of last year.
This showed that things were generally moving in a positive direction, despite some monthly declines.
Around 52% of consumers surveyed said they expected an improvement in the Irish economy in the next year, according to KBC Bank, while 18% foresaw a deterioration.
This is a slight disimprovement on July’s figure, when 53% expected improvement compared to 13% who expected a decline.
This may be explained by geopolitical uncertainty, according to Mr Hughes, while there is no indication that Budget 2015 speculation is impacting sentiment at present.
The September survey is expected to be impacted by these considerations, he said, particularly given the “tone of some recent commentary” on what it could contain.
