Irish consumer sentiment remains subdued in February

DUBLIN (Reuters) – Irish consumer sentiment remained subdued in February as concerns over household finances largely canceled out optimism around the economy in general, a survey showed on Thursday.

Ireland has remained the European Union’s fastest growing economy during three years of Brexit talks, but according to the survey’s authors, many consumers are not seeing an improvement to their financial circumstances from the buoyant economy.

The KBC Bank consumer sentiment index was 85.2 in February, little changed from January’s 85.5.

In October, when it seemed that the European Union and Britain could fail to reach agreement on the terms of Britain’s withdrawal from the trading bloc, the index fell to a seven-year low of 69.5 with neighbouring Ireland particularly exposed.

The index hit a 17-year high of 110.4 in January 2018 before consumers really began to be spooked by the possibility of a disruptive Brexit – a version of which is still possible at the end year if a favourable trade deal cannot be reached.

“Brexit concerns likely explained a significant element of the subdued tone of Irish consumer sentiment readings in recent years,” said Austin Hughes, chief economist at KBC Ireland.

“However, those worries don’t fully explain the pronounced lack of any ‘feelgood factor’ among Irish consumers, an absence that might appear at odds with the sustained strength seen in key Irish economic indicators such as last week’s buoyant jobs data for the final quarter of 2019.”

“It simply seems that progress at the level of the individual household from the conditions experienced through the ‘austerity years’ has fallen short of improvement heralded in much economic commentary,” Hughes added, referencing Ireland’s financial crisis of a decade ago.