Dip in confidence as consumers worry about risks to recovery

Consumer confidence in Ireland dropped slightly in February but remains broadly positive, according to a new survey.

The latest KBC Bank Ireland/ESRI Consumer Sentiment survey found that although the country faces a number of external uncertainties, fears of a downturn have not yet translated into reality for Irish consumers.

The index declined to 100.7 in February, a 2.4 point drop that followed a gain of 7.2 in January.

The report said the employment outlook in Ireland has been dented somewhat by a number of industrial disputes and high-profile jobs losses, including the loss of 500 redundancies at the HP plant in Leixlip announced last month.

“For the typical consumer, things have clearly stopped getting worse but they are not getting dramatically better over the past year,” the report stated.

There remains an element of volatility in Irish consumers’ mood, with the report revealing that sentiment only moved in the same direction in two successive months on one occasion over the past year.

The drop seen in February mirrored declines in similar metrics in a range of other countries.

Almost a third of respondents (31pc) anticipated their financial circumstances would improve in the year ahead, while 12pc foresee a deterioration.

“The February sentiment reading hints at a ‘one step forward one step back’ recovery for the typical Irish consumer,” said Austin Hughes of KBC Bank Ireland.

“Consumers sense some improvement in the broader economy but are also aware of notable risks to economic prospects,” Mr Hughes added.

Meanwhile, research conducted by Bank of Ireland in conjunction with Red C has shown that more than half of Irish people (56pc) save less than €300 per month.The research, which was carried out on 1,000 people last month, showed that 28pc of people save less than €100 per month, 20pc save between €100 and €200, while a further 20pc said the amount saved varied from month-to-month. Just 13pc of respondents said they do not save at all.

Well over half (57pc) of people said they were confident that they would be able to save the same amount for the next few years, while 39pc said they were not confident of continuing current saving patterns.

Almost half of those asked (48pc) said the were “saving for a rainy day”, with 38pc saying they would use some of their savings to take a holiday.

Home improvements was a priority for 22pc of people, while 20pc said they were saving for a new car.

Elsewhere, the Central Bank has said that it is taking measures to protect investors who are involved with ‘Contracts for Difference(CFDs).

CFDs are complex financial instruments that allow investors to gain or lose money on the value of an asset even though they do not own any part of the asset.

The Bank has published a new consultation paper that discusses its concerns about the use of CFDs and outlines current measures under consideration that would protect the interests of retail clients.

Measures under consideration include prohibiting the sale of CFDs to retail investors and the implementation of improved investor protection mechanisms.
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