Irish consumer sentiment improved marginally in September, recovering about half of the decline seen in August, research shows.
According to the latest KBC Bank Ireland consumer sentiment index slight gain in September is encouraging but the zig-zag pattern of recent months hints at an Irish consumer struggling to make sense of the a very unclear environment at present.
"More worryingly, the sentiment index remains at levels that suggest consumers remain worried about both the general economic outlook and their own household finances," said Austin Hughes, who conducted the analysis.
'Slight Easing In Negativity'
"The main driver of the improvement in Irish consumer sentiment in September was a slight easing in negativity about the broad Irish economic outlook although the mood remains overwhelmingly gloomy with only one in twenty consumers expecting the Irish economy to strengthen in the next twelve months and seven in ten expecting further weakness," Hughes said.
"At the margin, solid tax returns and some rebound in retail sales as well as industrial production likely contributed to the small improvement in this area as might moves towards unwinding of regional lockdowns," he added.
Discounting Initiatives
According to the report the improvement in spending plans in September may owe something to discounting initiatives by retailers around the reduction in VAT as well as other sales incentives intended to encourage a further rebound in consumer spending.
Hughes added: "The success of such measures could play an important role in underpinning job prospects through the remainder of the year. In this regard, the sentiment survey may offer some perspective on the extent to which any shortfall in consumer spending prompted by health restrictions limitations might be made up later in 2020."
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