Survey finds confidence in Irish economy growing but still fragile

While confidence in the Irish economy as a whole is growing, many consumers remain negative about the health and prospects of their local area.

These are the findings of the latest Global Economic Pulse report by market research group Ipsos.

The study provides a comparison of confidence and outlook across 26 major economies, comprising the G20 plus a few notable others.

In its latest analysis for April it included Ireland in the dataset as a once-off.

It found 34 per cent of Irish respondents rated the national economy as “good”, which was below the survey average of 39 per cent.

Differences in opinions across the countries were quite wide, however, with 75 per cent in Germany describing their national economy as good, compared to just 9 per cent in France.

When it came to confidence in the local economy, Irish sentiment was mixed.

Only 17 per cent of respondents expressed confidence in their local area, which was well below the average of 28 per cent.

However, Irish consumers were more optimistic about the local economy’s future prospects with 22 per cent believing it will be stronger in six months, which was ahead of most European countries, including Germany and Britain.

Globally, the survey found four in ten (39 per cent) respondents around the world rated their national economies as “good”, up one point from the previous month.

“After six years of turmoil in the Irish economy, confidence has been returning recently,” Kieran O’Leary, from the Ipsos Dublin office, said.

“ This is a common theme across numerous consumer confidence surveys, including our own local measurement which is standing at its highest point in 10 years,” he said.

“With falling unemployment levels and, more recently, rising house prices,

consumers are feeling more bullish about the prospects for the economy. However these increases are likely quite fragile and with a range of new tax measures hitting the economy during 2014, consumer confidence could yet fall back again.”

The survey comes in the wake of the latest KBC Bank Ireland/ ESRI consumer sentiment index which suggested confidence in the Irish economy was now at a seven-year high.

Separately, German business confidence appears to have taken a knock following data that showed growth in the first quarter in Germany was its strongest in three years but also indicated a poorer outlook for the coming quarters.

As a result, the Ifo business climate index fell in May to its lowest this year.

Standard & Poor’s has also raised Spain’s sovereign debt rating by one notch to BBB with a stable outlook, the third agency to do so in recent months in response to the country’s improving economic fortunes.