Soaring energy prices and a spate of factory closures are dampening consumer sentiment despite economic data portraying a buoyant economy, a new survey shows today.
The September edition of the IIB Bank/ESRI Consumer Sentiment Index dropped to 80.5 from 91 in August, its lowest level since December 2003.
The ESRI's David Duffy said that consumers cited job loss announcements, factory closures and rising prices for the recent slump in confidence.
"In particular rising energy prices, especially petrol prices had a negative impact on sentiment" Mr Duffy said.
Although Hurricane Katrina may also have contributed to economic difficulties in September, IIB chief economist Austin Hughes noted that September was not an isolated event.
Mr Hughes pointed out that the sentiment index has now fallen for three months in a row and suggests that consumers do not feel their financial situation is improving as they might have expected.
As a result, there is a pronounced disconnect between healthy conventional "macro" measures and downbeat consumer perceptions of their households' current experience, Mr Hughes said.