Consumer sentiment is on its worst streak for more than two years having fallen for the fourth successive month in October.
The KBC Ireland/ESRI Consumer Sentiment Index fell to 48.1 from 52.4 in September bringing the index to its lowest level for 17 months. This compares to 61.4 in August of this year and an all-time low of 39.6 recorded in July 2008.
The decline in October was the least significant monthly drop since July, the report said, suggestting consumers were perhaps prepared for a torrent of bad news on the banking and budget front during the period.
The survey also found that consumer expectations have fallen, from 37.9 in September to 28.8 in October, suggesting people are becoming more negative about the outlook for their household finances with an austere budget looming.
“Two thirds of respondents in October expected that their household finances would worsen in the next twelve months compared to just half of respondents in the September survey,” the report said.
The index that measures current conditions, which includes consumers' perceptions of the buying climate, improved to 76.7 in October from 73.8 in September.
KBC economist Austin Hughes said an improvement in the buying climate was most surprising.
“This might be due to aggressive price discounts by retailers or possibly some 'last hurrah' spending before facing up the looming pain of a very tough budget. This could suggest consumer spending might be more resilient than is currently feared,” he said.
A decline in the numbers on the live register in September and a series of job announcements appears to have improved consumers' assessment of the outlook for employment.
“The fact that consumers didn't mechanically downgrade their view of job prospects in the light of a gloomier outlook both for the economy as a whole and their household finances in particular is somewhat surprising,” the report said.
“It may also suggest a somewhat more positive assessment of the momentum in Ireland's jobs market of late.”
