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Consumer sentiment suffered its largest monthly drop on record in April, a survey showed today, demonstrating the scale and speed of the economic collapse unleashed by the coronavirus pandemic. 

Restaurants, bars and non-essential retail outlets have been closed in stay-at-home restrictions put in place on March 29. 

These restrictions are due to run until at least May 5 and the closures, as well as the closing down of construction sites, have already more than trebled the unemployment rate to 16.5%. 

KBC Bank Ireland’s consumer sentiment index nosedived to 42.6 from 77.3 in the previous survey conducted from March 3 to 10, before the gradual shutdown of the country began. 

It was the sharpest month-on-month decline in the survey’s 24-year history. 

It was also the second survey this month to show a record monthly fall after a collapse in activity reported by the services sector. 

The sentiment reading was slightly above the series’ lowest mark of 39.6 recorded in July 2008 when Ireland was among the countries hardest hit by the global financial crisis that pushed it into a three-year international bailout two years later. 

The scale of the drop this time around suggested the capacity of consumer spending to move back to a positive path “may depend critically on the scale, scope and speed of policy actions to re-start economic activity”, Austin Hughes, chief economist at KBC Ireland, said. 

“Expectations are still slightly above the low point of the previous crisis, presumably reflecting a judgment that the current crisis is finite in nature,” Mr Hughes said. 

“The details of the sentiment survey underline the scale of difficulties now being felt. Only one in 20 see their financial circumstances on an improving trend at present compared to one in five at the start of the year,” the economist added.

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