There was a marginal fall in consumer sentiment for a third month running in April, the latest consumer sentiment index from the Credit Union has found.
It follows on from four months of gains in sentiment in the latter part of 2023 and into January of this year as inflation abated and talk of interest rate cuts gathered momentum.
It is speculated that concerns around the employment market, amid news of layoffs, and a spate of high profile price increases may have weighed on the mood of consumers this month.
Although domestic energy bills are starting to fall in the aftermath of gas and electricity price cuts by suppliers, motor fuel prices rose steadily in April as the Government continued to unwind excise duty cuts introduced during the period of peak inflation.
The report author, economist Austin Hughes, said the modest slippage in sentiment captured in the recent sentiment monitors suggested that things were not getting better as fast or as forcefully as many consumers had expected.
“While consumer confidence no longer suggests fears of a slump, sentiment remains subdued,” Mr Hughes noted.
“In turn, this hints that consumer spending is more likely to remain sluggish rather than surge.”
The index reading of 67.8 recorded in April was down modestly from the March figure of 69.5.
However, the 6.4-point cumulative drop in the sentiment index over the past three months is less than half the cumulative gain seen in the previous four months.
“It suggests that Irish consumers are not quite as negative now as they were previously. That said, the current reading at 67.8 is significantly below the long-term average of 84.6 for the consumer sentiment survey, implying consumer confidence is quite subdued at present,” the report noted.
The fall in consumer sentiment here in April was mirrored in the US where a modest – but bigger-than-expected – fall in consumer confidence was attributed to the sluggish inflationary environment.
The preliminary reading of consumer confidence in the euro zone showed a fractional improvement in April that could be linked to a notably slower inflation rate of late.
The European Central Bank is widely expected to cut interest rates for the first time in five years in June.
The bank raised rates by a cumulative 4.5 percentage points between July 2022 and September of last year.
Article Source – Third month of decline in consumer sentiment – Credit Union index – RTE
