Consumer confidence at odds with reality
CONSUMERS were in a more upbeat mood as the new year arrived, but analysts warned yesterday this would be dampened by the impact of thinner paypackets.
The latest consumer sentiment survey shows that the national mood improved slightly in January, mainly because there were good bargains to be had in the winter sales.
New car purchases and sales of big ticket items soared in January, but Retail Excellence Ireland said that the underlying performance was very weak.
They said that at least 400 stores had closed last month, and that could be an underestimate as new reports were coming into them every day of small outlets closing in towns all around the country.
Three boutiques had closed in Mullingar alone, and that experience was being matched all around the country, said REI chief executive David Fitzsimons.
The KBC Ireland/ESRI Consumer Sentiment Index increased from 44.4 in December to 48.7 in January, although the mood is still much gloomier than it was this time last year.
ESRI analyst David Duffy said that consumers' improved perception of current economic conditions reflected the view that January was a good time to buy major items.
"Historically, this component has improved every January, reflecting at least in part the winter sales, followed by a more subdued figure in February. We expect this pattern to continue," he said.
KBC economist Austin Hughes agreed said the improvement in consumer mood was a pleasant surprise, but was less pronounced than in previous Januarys.
"It would be wrong to conclude that the January numbers hint at a turnaround in sentiment and spending. Irish consumer confidence has weakened considerably in recent months," he said.
The survey of 800 consumers also found that 70pc of those questioned fear that unemployment will get even worse this year.