Only 40% of Irish expect economy to improve over next year

Surprisingly, however, people seem positive about their own household finances...

Only 40% of Irish expect economy to improve over next year

A waiter gives back change in a cafe in Podgorica, Montenegro | Image: Darko Vojinovic / AP/Press Association Images

Irish consumers were "less optimistic but not apocalyptic" in July, according to the latest KBC Bank Ireland/ ESRI Consumer Sentiment Index.

While consumer sentiment had softened since June, the fall was smaller than declines seen in March or May and not as dramatic as expected following the Brexit vote.

However, Irish consumers' confidence has now dropped to its lowest level in 32 months, whilst the jobs outlook is at its weakest in 25 months.

Only four out of ten Irish people expect the economy to improve over the next 12 months.

Austin Hughes, chief economist with KBC Bank, said:

"It's not surprising that consumer sentiment is weaker in July after the Brexit vote in the UK.

"What's notable in the details of the survey is that consumers are expressing a lot of positive noises about their own household finances.

"So they are more concerned about the economic outlook, they are more concerned about jobs, clearly they're aware of the downside risks posed by Brexit.

"But they're also emphasising that things are getting a little bit better for them, that their household finances are improving and there's a strong sense that they intend to spend over the next few months."