Sentiment among Ireland's hard pressed consumers lifted slightly last month, helped by interest rate cuts and some decline in the cost of fuel, the latest KBC Bank Ireland/ESRI Consumer Sentiment Index showed today.
The recovery, however, is "patchy", according to KBC with consumers still worried about Irish unemployment and the economy.
The index increased to 62.3 in June from 61.0 in May. The Index for June of last year was 56.3 and the 3-month moving average rose to 61.9 in June from 61.4 in May.
"The latest Consumer Sentiment index reveals a slight increase in June, with most of the previous month's decline having been reversed. Despite some recent hesitation, the broader trend reveals a gradual recovery in sentiment since the end of last year," said Eddie Casey of the ESRI.
He added that, overall, the improvement in sentiment appears to have reflected less negative perceptions of the current environment, with consumers reporting a slight improvement in the buying climate and their financial situations.
"Consumers remain concerned that the economic outlook remains fragile, however, with a downward revision to the expectations for employment and the general economic environment weighing on the increase in sentiment in June," he said.
Austin Hughes, KBC Bank Ireland, said that the fact that the rise in sentiment in June largely offset the decline in May emphasises the patchy nature of the improvement in the mood of Irish consumers through the first half of 2012.
"n view of the difficult and uncertain economic backdrop facing Irish consumers, this sort of jagged pattern about a modestly improving trend is probably as much as can be expected. If sentiment continues to improve modestly through the remainder of 2012, this would seem consistent with a gradual stabilisation in consumer spending." "The June results show a divergence between the greater concern expressed about the broad economic outlook and a little less pessimism in relation to households' own financial situations. This may reflect a 'silver lining' in terms of lower oil prices and a possible drop in borrowing costs that accompanied darker Euro zone clouds. It should also be noted that the improvement in sentiment in June largely reflects a drop in negative responses rather than any marked increase in positive replies. So, there is no sense Irish consumers expect any dramatic improvement in their circumstances that would prompt much stronger spending."