Surprise bounce in consumer sentiment in November
Consumer sentiment showed a significant and somewhat surprising
rebound in November which may signal a stronger outlook for Christmas
spending.
The latest KBC Bank Irish consumer sentiment index jumped to 65.5 in
November from 52.6 in October, returning the index to its strongest
level since March.
However, the November reading still remains substantially below both
its early 2020 reading of 85.5 or the average of the 25 year survey of
87.
KBC Bank Ireland said the November bounce may be as a result of a
spate of strong economic releases and several new job announcements
during the survey period.
It also said that consumers may be focussed ahead on the prospect of
some Christmas light at the end of a pandemic-related tunnel.
But the bank also highlighted the “choppy nature” of survey readings
in recent months as consumers in Ireland and elsewhere attempt to make
sense of an unprecedented and very uncertain environment.
“It should also be emphasised that the level of the November
sentiment reading still points to a cautious and likely confused Irish
consumer,” KBC Bank Ireland’s chief economist Austin Hughes said.
KBC noted that all five main elements of the consumer sentiment index
showed material improvements between October and November but the gains
were most pronounced in relation to the macro components of the
survey.
It said the pandemic has imparted a severe macro shock on Ireland and
elsewhere but the intensity of impact across age groups, regions,
employment categories and the income distribution has varied widely.
Therefore the “personal” elements of the survey have seen a smaller if still substantial weakening, the bank added.
“Although it is vitally important to counter threats to the immediate
outlook and support sentiment and spending over end-year, an economy is
not just for Christmas,” Austin Hughes said.
“The key task must be to ensure the policy framework develops in a
manner that limits the longer term threat to jobs and incomes as well as
health outcomes,” he added.
Article Source: Surprise bounce in consumer sentiment in November – RTE
