Ireland: Consumer confidence rises to almost nine-year high in January
February 5, 2015
The KBC Bank Ireland/ESRI Consumer Sentiment Index increased from 90.5 points in December to 101.1 points in January, which marked the highest level since February 2006. January’s result reflects improvements in both consumers’ perceptions of the current economic environment and their outlook for the Irish economy. The increase was broad-based, with all subcategories experiencing gains over the previous month. Particularly, the Index of Current Economic Conditions increased as consumers were more positive about their current financial situation and the prospects of purchasing goods.
According to the survey report, the main driver of rising confidence in January was a notable improvement in the assessment of personal finances; in January, consumers expected household finances to improve for the first time since 2007. KBC stated that the following aspects likely contributed to greater optimism in household finances: “[f]or the first time since 2008, Budget measures should boost rather than drain purchasing power. An improving property market may also be having a positive ‘wealth effect’ on confidence while low or negative inflation also means incomes stretch further. In this regard, we think tumbling oil prices through the survey period may have had a significant effect on sentiment.” In addition, according to the survey report, January’s result suggest that, “the economic recovery should be more broadly felt in 2015 and this should prompt healthier household spending.”