Consumer sentiment improved in January as the winter sales gave the traditional boost in confidence for the year ahead, according to the latest consumer survey.
The most recent ESRI/IIB consumer sentiment index of current economic conditions increased sharply to 115.5 in January from 102.6 in December. However the forward-looking sub-index, which measures the expectations index, declined to 100.9 in January, from 104.7 in December.
Commenting on the findings, the ESRI's Mr David Duffy said the sharp improvement in consumers' perceptions of the current environment reflects the view that January was a good time to purchase major items.
"Historically this component has improved every January, reflecting, at least in part, the winter sales, followed by a more subdued figure in February.
"We expect this pattern to continue and as a result some moderation might be anticipated in this element next month."
Mr Austin Hughes, chief economist at IIB Bank, concluded that Irish consumers are becoming more confident about income prospects and were aggressively hunting for bargains in post-Christmas sales.
But Mr Hughes cautioned that the sub-component dealing with employment prospects lagged behind overall sentiment, suggesting consumers are still sensitive to bad economic news.