Record low for consumer confidence

FEARS OVER job losses and rising prices have pushed Irish consumer confidence to a record low.

The overall IIB/ESRI index of consumer sentiment published yesterday dropped to 56 in April, down from 63.3 in March and is the lowest reading on record.

The corresponding figure for April 2007 was 83.

ESRI economist David Duffy said one out of every three consumers surveyed expected their household finances to get worse over the next year.

Austin Hughes, IIB chief economist, said the results suggest consumers were bracing themselves for harder times ahead.

"The key uncertainty is whether Irish consumers have now prepared themselves fully for a tough year or [whether] sentiment and spending might weaken further," he said.

Mr Hughes said a reading showing "nine out of ten consumers now fear higher unemployment compared to five out of ten in May 2007", indicated how sharply perceptions of job security has fallen.

The 12,000 rise in the number signing on the Live Register in March had been "critical to a much greater sense of fear among consumers this month", he added.

A range of companies including Nexans in Athlone, Kimball Electrical in Longford and Ryanair announced job losses over the period.

However, Mr Hughes pointed out that the number of job losses in April was more limited than earlier months of the year and was actually outstripped by new jobs.

Part of the reason this was not reflected in the survey was that "news of new jobs resonates far less with those already in employment than news of redundancies".

The rising cost of frequently purchased staples and spiralling energy and food costs meant that consumers felt that their cost of living was rising far faster than data suggested.

In March the annual rate of inflation measured by the CSO surprisingly reaccelerated to 5 per cent, leading to concerns of a spiralling cost of living, particularly for energy and food products.

With the weaker job market seen as holding down wages many consumers see inflation as directly weakening household finances.