Irish consumer sentiment steadies, Brexit still weighs

Irish consumer sentiment steadied in May as continued concerns over Brexit kept a lid on the potential gains made from an improvement in the jobs outlook, a survey showed on Tuesday.

The KBC Bank consumer sentiment index rose to 89.9 in May from 87.7 in April, an increase that the authors said was too small to suggest any significant mood change and kept the series hovering not far above February’s 51-month low of 86.5.

While consumer sentiment and business surveys have indicated some nervousness over neighbouring Britain’s protracted exit from the European Union, data last week showed jobs being added at the quickest pace since Ireland became the fastest growing economy in the EU five years ago.

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The May survey showed a clear improvement in views on the jobs market, KBC Bank Ireland Chief Economist Austin Hughes said. But there was only limited relief that Britain avoided a no-deal Brexit when the deadline for its departure was extended until the end of October.

“As risks in this regard were seen to be delayed rather than dispelled, there was no marked jump in confidence, particularly in circumstances where global economic prospects remain challenged,” Hughes said.

Respondents were asked for the first time how they felt Brexit might impact them personally, with 69% fearing it would lead to an increase in the price of goods but just 18% afraid it could have a negative impact on their job prospects.

Hughes also noted that after data on Friday showed consumer sentiment at an eight-month high in Britain, concerns about the economic consequences Brexit cast a greater shadow over Irish consumers than elsewhere, including Britain.

“The absence to this point of a widely predicted collapse in UK economic conditions appears to have closed British consumers’ eyes as to the prospective damage Brexit could cause in the future,” he said.

“In contrast, our reading of the Irish survey results suggests no appetite among Irish consumers to ‘get on with it’. In part, this may reflect a more realistic sense of the potential dislocation that Brexit may bring but it may also be that the scars of the recent crisis make Irish consumers particularly sensitive to any form of downside risk.”