Fears over job losses and rising prices have pushed Irish consumer confidence to a record low, according to a survey published today.
The overall IIB/Esri index of consumer sentiment dropped to 56 in April, down from 63.3 in March and is the lowest reading on record. The corresponding figure for April 2007 was 83.
Esri economist David Duffy said one out of every three consumers surveyed expected their household finances to get worse over the next year.
Austin Hughes IIB chief economist said the results suggest consumers are bracing themselves for harder times ahead.
“The key uncertainty is whether Irish consumers have now prepared themselves fully for a tough year or [whether] sentiment and spending might weaken further.”
The key uncertainty is whether Irish consumers have now prepared themselves fully for a tough year or [whether] sentiment and spending might weaken further - IIB chief economist Austin Hughes
Mr Hughes said a reading showing “9 out of ten consumers now fear higher unemployment compared to 5 out of ten in May 2007” indicated how sharply perceptions of job security have fallen.
The 12,000 rise in the numbers signing on the live register in March had been “critical to a much greater sense of fear among consumers this month”, he added.
A range of companies including Nexans in Athlone, Kimball Electrical in Longford and Ryanair announced job losses over the period.
However, Mr Hughes pointed out that the number of job losses in April was more limited than earlier months of the year and were actually outstripped by new jobs.
Part of the reason this was not reflected in the survey was that “news of new jobs resonates far less with those already in employment than news of redundancies”.
The rising cost of frequently purchased staples and spiralling energy and food costs meant that consumers’ felt that their cost of living was rising far faster than data suggested.
In March the annual rate of inflation measured by the CSO surprisingly reaccelerated to 5 per cent, leading to concerns of a spiralling cost of living, particularly for energy and food products. With the weaker job market seen as holding down wages many consumers see inflation has directly weakening household finances.
The survey also indicates that consumers are notably more worried about the general economic climate than about their own personal finances, Mr Hughes added, noting that weaker than expected March tax revenue figures probably contributed to that
Esri economist David Duffy said one out of every three consumers surveyed expected their household finances to get worse over the next year.
The April reading is the lowest since the survey began in February 1996 and comes as the unemployment came close to nine-year highs in March.
