February 16, 2011
By Staff Reporter
Industry and construction are worst hit, though consumer spending remained strong.
Overall, a European Commission survey found that eurozone economic sentiment was at a six-year low in March, as business and household morale both suffered even before war broke out in Iraq.
The drop was the biggest since the Sept. 11, 2001 air attacks on the United States.
The data was mostly collected in the first two and a half weeks of March, before the war in Iraq began.
The EU pattern was the opposite to Ireland’s, with consumer confidence falling faster than business.
Austin Hughes, economist at IIB Bank, said that one reason for the difference might be lower interest rates, which were cut a quarter percent in March.
“Heavy mortgage borrowings make Irish consumers very sensitive to interest rates,” he said.
“But there could also be a difference opening up between public and private sector workers, with public sector workers anticipating a large rise in real incomes from the benchmarking awards.”