IRISH CONSUMERS SAID goodbye to 2013 in a “notably more positive mood” than they were a year earlier with consumer sentiment at its highest level in six and a half years.
The KBC Bank Ireland/ESRI consumer sentiment index rose significantly to 79.8 in December from 71.0 in November. This compares to the considerably lower figure of 49.8 recorded for December 2012.
Austin Hughes, chief economist at KBC Bank Ireland said there is “a growing sense that the economy has moved onto a healthier trajectory, that more jobs are being created than lost and that significant pressures on household finances may be set to ease somewhat”.
Some 51 per cent of respondents said they expect the Irish economy to improve in the coming year compared to just 21 per cent who predict deterioration. When compared to the 53 per cent of people who were negative on the economic outlook in December 2012, this is a marked improvement.
Bailout exit
However Hughes cautioned that this is not to suggest that consumers are in a buoyant mood with sentiment still below the longterm average. Monthly patterns over the last seven months have been uneven, which Hughes said is partly because of the “array of opposing and frequently bewildering” developments in the global economy. Irish consumer thinking has also been “shaped by some very painful experiences through the recent crisis”.
Irish consumers are feeling more positive about their own financial situations as well as the wider situation, the index found. Hughes points out that media coverage about Ireland’s exit from the bailout may have eased nerves during the survey period.
As for the jobs market, while consumers saw several new job announcements and a further drop in numbers on the live register, unemployment is still above 12 per cent and “any news that jobs are being lost – often on a significant scale in well known companies- can have a marked impact on sentiment
Consumers in the United States and the the Euro area were also feeling more upbeat in December though UK consumers reported a third consecutive monthly weakening in sentiment.
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