CONSUMERS are more confident now about their finances than they have been in almost five years, new figures show.
The consumer sentiment index shot up in August, largely due to homeowners expecting a new cut in eurozone interest rates.
Consumers are still cash-strapped and cautious, but becoming less so, according to the index released today by KBC Bank and the Economic and Social Research Institute.
It was the seventh month out of the past eight that the index has shown a rise. However, the rise in the index in August was modest.
KBC Bank economist Austin Hughes said the rise in confidence was due to easing of fears the economy would continue to deteriorate. There is a sense we are at the bottom of the downturn, he said.
It was not necessarily the case that there was a radical rise in the outlook of consumers, he said.
And he warned that the confidence of consumers could dive if the eurozone crisis worsens, with December’s austerity Budget a big worry for householders.
The Consumer Sentiment Index rose to 70.0 in August from 67.7 in July.
This month’s reading is the strongest since October 2007.
Mr Hughes said the index has returned to levels last seen before the economic downturn fully took hold.
“This is not to say that the circumstances of the average Irish consumer are the same now as they were in the autumn of 2007. Clearly, that is not the case.
“The nature of a sentiment index is that it attempts to measure the subjective mood of consumers. Five years ago, Irish consumers were becoming increasingly nervous about the economic outlook. On the evidence of recent data, those same fears are now beginning to slowly lift.”