Irish consumer sentiment fell to a near two-year low in December as increased uncertainty undermined confidence, a new survey reveals.
The KBC Bank Ireland/ESRI consumer sentiment index slipped to 96.2 in December from 97.8 in November, its lowest reading since February 2015 and well below the level of 103.9 recorded the previous December.
"The main message coming from the sentiment survey through 2016 appears to be that, from the perspective of the average Irish consumer, the economic recovery has significantly over-promised and under-delivered in the past year," KBC said.
Four of the five main elements of the index recorded lower monthly readings than in November, KBC said, with the jobs component of the survey proving an exception reflecting the release of strong official employment data and a number of new jobs announcements.
However, consumers downgraded their assessment of the general outlook for the Irish economy, producing the weakest monthly reading on broad economic prospects since November 2013. While 38 per cent of Irish consumers expect the economy to strengthen compared to 21 per cent who expect it to weaken over the next 12 months, this is below the year-earlier reading where 61 per cent had a positive outlook compared to 12 per cent who were negative.
The more uncertain economic climate also made consumers more cautious about their own personal financial circumstances and all three elements of the survey related to household finances edged lower in December.
"The drop in consumer sentiment in December neatly captures the sense of a year that failed to live up to expectations for many Irish households. The details of the survey are consistent with an Irish economy that is continuing to grow but one where that growth is uneven and has not repaired many of the losses suffered through the preceding downturn," KBC said.