Consumer confidence hits nine-year high
Consumer confidence has hit a nine-year high.
And households are now expecting the first rise in income since 2007.
Lower oil prices and post-Christmas sales have boosted confidence, the Economic and Social Research Institute/KBC Bank consumer sentiment index shows.
The survey hints at stronger consumer spending this year, said economist with KBC Bank Austin Hughes.
The overall index increased in January to 101.1 from 90.5 in December.
Mr Hughes said: “The key driver of the rise in confidence in January is a notably more positive view of household finances.
He said that the January survey shows that for the first time since mid-2007 more consumers expect their household finances to improve rather than worsen in the year ahead.
“This marks a notable change in thinking,” Mr Hughes added.
Meanwhile Irish businesses have the rosiest outlook in Europe about their prospects.
The consumer sentiment index shows that People are also more optimistic about the outlook for the jobs market following several new jobs announcements and positive statements from the IDA and Enterprise Ireland
It found that consumers finally expect to see an improvement in their household finances after years of decline.
This contrasts markedly last with consumer feeling in the last two years that while the overall economy was improving, this wasn’t having an impact on their own personal circumstances.
Falling oil prices and post-Christmas sales are also contributing to the upbeat outlook, while a slight reduction in the tax burden and increase in some benefits in Budget 2015 was also helping, the survey found.
“Sentiment was improved for every category. In particular, consumers have become more positive about their current, and the outlook for their household finances, as well as becoming more positive about the buying environment for major household durables,” said Ciara Morley of the ESRI.
Austin Hughes said the fact people expected their own finances to improve during the year was a notable change caused by several factors.
“For the first time since 2008, budget measures should boost rather than drain purchasing power,” he said.
“An improving property market may also be having a positive “wealth effect” on confidence while low or negative inflation also means incomes stretch further”.
An international business report from consultants Grant Thornton found that Irish businesses are the most optimistic in Europe about growth prospects in 2015.
They are the most confident they’ve been since 2007, with 82pc positive about the chances of growth this year.