Consumers feeling happier

Latest Consumer Sentiment Index report from KCB Ireland and the ERSI shows Irish consumers feeling more confident in August, September and October

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The latest consumer sentiment survey from KCB Ireland and the ESRI shows that Irish consumer sentiment improved for the third consecutive month during October. The consumer sentiment index, which measures consumer confidence and buying climate, increased from 49.6 in September to 54.2 last month, up from 48.7 in August and the all time low of 39.6 in July.

Economist David Duffy from the ESRI said that the increase was once again due to improved expectations among consumers, which was in line with simultaneous improvements in the economy. The index of current economic conditions showed a modest improvement to 74.7 in October from 72.3 in September.

However, Duffy commented, “Although there has been an improvement in sentiment consumers continue to be cautious. Three out of four consumers remained concerned about the outlook for the labour market.

KBC Ireland economist Austin Hughes also remarked that the results were the best seen in 18 months and indicate that Irish consumers “may believe the economy has reached a turning point.” While he concurred that most still expect tough conditions for the foreseeable future, he thinks “there is a sense that the absolute worst may be behind us.”

According to Duffy the improvement in consumer sentiment in October was broadly based on “a range of supportive influences.” Clear signs of an improvement in the global economy, a further fall in Irish consumer prices, and the expectation that borrowing costs will remain low for some considerable time, all contributed.

“It also seems that Irish consumers feel the news on jobs is slightly less awful of late and it may be the case that they are prepared to give the Government the benefit of the doubt on NAMA,” he said.

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