Recession blues easing as we see light at end of the tunnel
Consumer confidence up. Photo: Bloomberg News
CONSUMER confidence lifted slightly in December, with 56pc of adults believing that the recession is affecting others more than themselves, as the Government pushed through the toughest Budget in the history of the State, according to a new survey.
The new AIB/Amarach Recovery Indicator Index came in at 18.3 in the last month of the year, up from 17.8 in November.
The market research firm had been polling 1,000 consumers on a monthly basis since last April, but this is the first time that the figures have been published.
The index is designed to help businesses and planners anticipate the timing of economic recovery.
Still, the latest survey results, carried out in the week of the Budget, mark a significant improvement from a reading of 7.9pc in April, following Finance Minister Brian Lenihan's emergency Budget.
Respondents
Half of all respondents remain optimistic in spite of the current economic situation, which is consistent with November's finding.
But the level of people conscious of paying off debts as a priority has eased to 57pc from 62pc a month earlier, while the level of people saving more because of the recession has dipped to 26pc from 29pc.
However, the researchers pointed out that this could be partially attributed to people loosening the purse strings due to Christmas spend.
The level of individuals who think that now is a good time to buy a house has declined two percentage points to 60pc.
"All told, we seem to be going through a stabilisation in consumer confidence at the moment," said Gerard O'Neill, chairman of Amarach. "Consumers are seeing light at the end of the tunnel for the economy -- but we are yet to see a turning point for their personal finances."
Some 56pc of adults felt the recession is hitting others more severely than themselves, up from 52pc in November.
Data
Meanwhile, data out yesterday showed that confidence among US consumers rose for a second month in December as pessimism over the outlook for jobs diminished.
The US Conference Board's confidence index increased to 52.9, in line with market expectations, from 50.6 in November.
Another report showed home prices climbed in October for a fifth consecutive month.
The report showed consumer attitudes about current conditions decreased to the lowest level in 26 years and expectations over wages also fell, a reminder that spending may be slow to recover with government assistance.
A jobless rate that is forecast to exceed 10pc through the first half of next year may prompt policy makers and retailers to maintain tax breaks and incentives to entice buyers.
"Americans are reading that a recovery is under way but, looking at the unemployment rate, not many of them are feeling it where it really counts just yet," said Avery Shenfeld, chief economist at CIBC World Markets in Toronto.
- Joe Brennan
Irish Independent
