CONSUMER SENTIMENT rose in June to its strongest level since October 2007, according to the latest survey from KBC and the ESRI.
The index continued a trend upwards, rising from 65.3 in May to 67.9 in June, far above its trough of 39.6 registered in July 2008. “The improvement reflects a more positive assessment by consumers of both the current situation and the forward-looking components of the index,” said the ESRI’s David Duffy.
The index measuring current conditions rose to 88.4, from 82.5 in May, while the expectations index, which focuses on how consumers view prospects over the next 12 months, rose only marginally, from 53.7 to 54.1.
“Expectations rose as there was some improvement in consumers’ perception of the economic outlook,” said Mr Duffy.
“However, consumers remain concerned about the outlook for employment and for their household finances over the next 12 months,” he added.
The increase in Irish consumer sentiment is in contrast to the euro zone, where June sentiment improved only marginally from an eight-month low in May.
Weakened morale among European consumers has been blamed for the decline as concerns grow that living standards come under pressure owing to government austerity measures.
“For the past couple of years, European consumers have been cushioned to a notably greater extent from the fallout of the financial crisis,” said KBC’s Austin Hughes. “Now, as Irish consumers appear to see a little more light at the end of the tunnel, their continental counterparts are beginning to contemplate a more difficult future.”
Even if the figures are unlikely to herald a spending surge by Irish consumers, Mr Hughes described them as “encouraging”.
“Although they suggest Irish consumers are still very cautious and conditions remain difficult, they also suggest that fear is fading and many consumers are beginning to sense an improvement in general economic conditions and their own circumstances,” he said.
“These results point towards an economic recovery that may be modest and fragile and one that is not being felt by all, but, nonetheless, they suggest the Irish economy is moving in the right direction.”
