Belfast Telegraph

Irish consumer confidence at new high

By Charlie Weston

Consumers in the Republic are feeling more confident, leading to hopes of greater movement of money in the Irish economy.

The Republic's consumer confidence index rose marginally last month and is now at a seven-year high.

Economist Austin Hughes said the trend suggested consumers were increasingly confident the Irish economy was emerging from the extreme difficulties of recent years.

"This largely reflects a gradual easing in fears. So, the rise in the index is primarily the result of a reduction in the negative influences on sentiment rather than the emergence of an array of extremely positive factors boosting confidence," Mr Hughes said.

However, he said the sentiment index would have to rise a good deal further to signal an environment in which Irish consumers will spend more freely. He said the index will continue to improve, but not dramatically.

"We don't think a dramatic pick-up in spending is already under way even if the trend should improve through the coming year. This means there is a risk that the buying climate element of the survey weakens significantly in the near future," he said.

Figures show half of Irish consumers expect the economy to improve further in the next 12 months, but the number expecting a weakening edged up from 19% to 21% last month.

Around a third of consumers see the Republic's jobs market weakening in the next year, while 36% predict an improvement, down from 40% in January.

Mr Hughes added: "We think the February reading should be seen as consolidating recent gains in the sentiment index. It suggests consumers are increasingly confident that the Irish economy and the outlook for jobs are improving."

But he said consumers were likely to need clearer evidence that things would get notably better for their households before they were willing to scale up their spending.

Belfast Telegraph