Consumer confidence now higher than boom years of 2006 and 2007
Disposable incomes finally beginning to show modest growth, according to latest Consumer Market Monitor for Q4 2014
Print2 March 2015
AT A GLANCE: The Consumer Market Monitor for quarter four 2014
- Consumer confidence rose to a record +12 in Q4 2014, higher even than the boom years of 2006-2007.
- Consumer spending contributed to economic growth for first time since the crash of 2008.
- The retail sales volume index is now back to exactly where it was in 2005.
- Volume of consumption projected to expand 1.6% for 2015.
- Car sales show 30% year-on-year growth, with 92,361 units sold in 2014.
Consumer spending contributed to growth in the wider economy in 2014 for the first time since the crash in 2008, according to the latest Consumer Market Monitor (CMM), published by the UCD Michael Smurfit Graduate Business School and the Marketing Institute of Ireland.
The Q4 2014 Monitor, which uses data from the Central Statistics Office (CSO), the Central Bank, and the European Commission among other sources, indicates that consumer confidence now stands at +12 points, up from +5 in December 2013. This is even higher than the boom years of 2006 (-0.23) and 2007 (-10.73) and significantly higher than the UK, where consumer confidence now stands at +3.5.
The feel good factor is continuing into this year, with the latest consumer confidence figures showing January 2015 to be up again on December.
“Overall, retail sales have turned a corner and are back on a growth path, although off a very low base,” said Mary Lambkin, professor of Marketing at UCD Michael Smurfit Graduate Business School.
“Disposable incomes are at last beginning to show modest growth as a result of jobs growth and this, coupled with greater availability of credit, is leading to accelerated spending on many categories of goods and services,” she added.
The latest survey also shows that, for the first time since mid-2007, more consumers expect their household finances to improve rather than worsen in the year ahead.
Sales of new cars experienced a major turnaround in 2014, with 92,361 units sold in the full year, a 30% increase on the previous year. This buoyancy is continuing this year, with 30,000 new cars sold in January 2015, a 31% increase on the same month last year.
Household disposable incomes rose by 3% in 2013 on the back of growing employment, the first increase since 2008. Disposable incomes rose by an estimated 1% in 2014 and are expected to rise further this year in response to rising employment figures and falling oil prices.
Retail sales (excluding motor vehicles) rose 3.7% by volume in 2014. Growth in the sale of household goods was particularly strong, with furniture and lighting up 21% in volume in Q4 2014, electrical goods up 8% and hardware, paints and glass up 5%.
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