Exports - Consumer jitters over fate of euro
Consumer jitters over fate of euro
IRISH consumers remain nervous about the potential break-up of the euro currency as the export sector faces a challenging year ahead.
The latest KBC Bank Ireland/ESRI Consumer Sentiment Index has plummeted to 49.2 from 60.1 in November, the largest monthly drop since August 2001. The significant decline in December came after an abnormally large rise in October.
KBC Bank Ireland chief economist Austin Hughes said that such "sharp gyrations" are extremely unusual in the sentiment survey.
"The average monthly change in the Index is around 0.3 points," he said. "So, two extremely large and opposite changes within three months suggests something out of the ordinary is happening.
"Volatile sentiment readings of late probably reflect extreme uncertainty and exceptional economic circumstances."
Consumers are increasingly uncertain about the future of the euro, another severe budget and the potential of more squeezes on household spending power in coming years. These factors combined to produce a notably gloomier mood among Irish consumers last month.
Meanwhile, there was further dark news for the export sector.
The Irish Exporters Association said it expects the value of exports to grow by just 3pc due to eurozone difficulties.
"We're in for a very difficult 2012," said John Whelan, chief executive of the IEA, at the launch of its annual review yesterday.