DUBLIN (Reuters) - Irish consumer sentiment fell to its lowest level this year in May, a survey showed on Friday, a further sign that despite being Europe’s fastest growing economy, Ireland is failing to deliver the kinds of gains consumers expect.
Ireland’s economy has been the best performing in Europe for the last three years, dramatically driving down unemployment but an uneven recovery has failed to spur on sentiment with many still reeling from the financial crisis of almost a decade ago.
The KBC Bank Ireland/ESRI Consumer Sentiment Index fell to 100.5 from 102.0 in April, nearer a two-year low of 96.2 hit in December than the 15-year high of 108.6 reached just over a year ago.
“We wouldn’t exaggerate the significance of the latest monthly fluctuation but the broader softness of recent readings does seem at odds with the strength of many other short term Irish economic indicators,” KBC chief economist Austin Hughes said.
“The lack of clear positive momentum in the survey strongly hints that the economic recovery is falling well short of consumers’ expectations in terms of delivering a material boost to their living standards.”
Hughes said the current readings suggest consumers remain modestly optimistic and are consistent with a growing economy but the survey implied that the upturn in consumer spending in the economy may remain constrained.
The survey showed that while just under a quarter of Irish consumers judge that their personal finances improved in the past year, a broadly similar number reported a deterioration in their living standards.
“The now long established recovery has failed to deliver anything like the scale or spread of the improvement in financial circumstances that Irish consumers had expected,” Hughes said.
Reporting by Padraic Halpin