Consumer confidence suffered its second successive sharp monthly drop as concerns about living costs that hurt the macro economic outlook in March spread into a weakening of spending plans in April.
The KBC Bank Ireland consumer sentiment index dropped to 57.7 from 67.
This was an almost identical fall to that from February to March, which was the sharpest since the start of the Covid-19 pandemic when much of the economy shut down.
The index stands significantly below the long-term average of 86.6 and the cumulative 24 point decline since inflation began climbing sharply over the last three months was the second largest in the 26-year history of the survey.
It was scarcely surprising that there was a downgrade of the current and future state of household finances, the survey’s authors said, citing upward pressure on energy costs and increased concerns in relation to food prices.
“A more threatening development was a marked pull-back in consumer spending plans,” KBC Ireland chief economist Austin Hughes said.
The April 2022 purchasing climate is the weakest since the Covid-closedown related results for April and May 2020 and among the lowest on record for this component,” the economist said.
“Significantly, this may hint at a marked pull-back in consumer spending that is both forced and fear-driven,” Mr Hughes said.
It also suggests the broader Irish economic outlook for the coming months may feel a good deal cooler than might be inferred by most economic growth forecasts – including KBC’s – he added.
The Finance Department said last week that it expected the impact of the war in Ukraine and rising inflation to slow rather than stop economic expansion this year, cutting its growth forecast for the domestic economy to 4.2%.