Dublin consumers more fearful than rest of country

A positive change in sentiment overall...

Consumers outside of Dublin are spending more than their capital-based counterparts at the moment.

The latest KBC consumer sentiment index shows that there's been an increase in confidence across the country in the first quarter of 2017, reflecting an improvement in household finances.

In the case of Dublin consumers, the recovery in sentiment in early 2017 only reversed about half of the sharp deterioration seen in the previous quarter, while recent gains elsewhere put confidence close to the highs that were seen in late 2015.

In both instances, the latest reading suggests a broadly positive outlook prevails at present, and implies some easing in the worries that marked the late 2016 results.

However, the most recent reading suggests Dublin consumers remain notably more cautious with their spending than the rest of the country, suggesting they are more concerned about issues such as Brexit and the ongoing problems with the property market.

The main driver of better consumer sentiment in early 2017 both in Dublin and elsewhere was a less nervous view of household finances.

As the diagrams suggest, the uptick in areas of personal finances was slightly greater for Dublin consumers than for those in the rest of Ireland. Fears of a sharp worsening in household financial conditions that particularly concerned Dublin consumers in late 2016 have not materialised, prompting a ‘relief rally’.

Austin Hughes, KBC chief economist, said:

"Consumers are happy that there are a few more jobs to be had, that there's more money coming from government spending programmes and as a result they're maybe a little more willing to spend at this time.

"It doesn't mean they're blind to the economic risks in the current environment but they are seeing important counter weights in the form of stronger employment growth and a little more support from government policy."