Irish consumer sentiment lifted by post-Christmas sales, jobs news

Irish consumer sentiment improved slightly in January as a seasonal Christmas effect and positive jobs news offset concern around the possibility of Britain crashing out of the European Union without a deal, a survey showed on Thursday.

Ireland’s has had the best performing economy in the EU since 2014 and high profile job announcements last month included plans by Facebook and Salesforce to add 2,500 new employees to their Irish workforces.

However worries over the economic consequences of an interruption to trade with its larger neighbour has weighed in recent months and although the KBC Bank Ireland/ESRI Consumer Sentiment Index rose to 98.8 from 96.5 in December, it was still well below the 2018 average of 102.5.

“The gain in confidence this month is often referred to as the ‘January Effect’. The uplifting sense of a new year combined with recent holidays often result in highly optimistic responses,” the ESRI’s Philip Economides said.

“However, this same effect did little to diminish the loss of confidence in the broader economic outlook,” he added, pointing to a fall in the survey’s general economic outlook indicator.

The report’s authors said the improvement was probably temporary, and consumer sentiment could weaken in February when Christmas bills arrive and remain choppy as the March 29 date for the UK’s scheduled departure from the EU approaches.

With consumers adopting a more cautious approach of late, there seemed to be scope for either a soft Brexit ‘bounce’ or a hard Brexit ‘bump’ in spending as 2019 progresses, they added.