Consumer sentiment jumps to six year high in September
CONSUMER sentiment jumped to a six year high in September, new figures show.
The KBC Bank Ireland/ESRI Consumer Sentiment Index rose to 73.1 in September from 66.8 in August, bringing the index to its highest level since September 2007.
The index also showed that positive views on economic outlook exceeded negative views for first time since 2006.
However, the bank warned that the improvement did not seem to reflect any dramatic change in the economic environment in the past month but reflected an element of ‘catch-up’ in sentiment and could by vulnerable to concerns about the looming budget.
Consumers are staring down a fifth year of tough austerity budgets despite the country emerging from recession earlier this month.
The original target is for a €3.1bn budget adjustment in October but it is not yet clear if the Government will ease off on that figure.
More information will be available this week when the latest Exchequer Returns are released giving more detail on the recent tax take and spending.
The sharp rise in Irish consumer sentiment in September comes against a backdrop of a modest improvement in the mood of euro area consumers, a six year high in UK consumer confidence and some easing back from previously upbeat US consumer sentiment readings,” said Austin Hughes, chief economist at KBC.
He added that the broad trend in Irish consumer sentiment has been gradually upwards through much of 2013 but monthly readings have been more volatile than in most other countries.
"This tendency towards ‘jumpier’ sentiment readings in Ireland likely reflects a considerable degree of uncertainty on the part of the Irish consumer," he added.
Mr Hughes said that it is easy to understand why Irish consumers would be more concerned about their current circumstances and cautious about their future than their counterparts in many other countries.
"We think the broad message coming from the trend in the Irish sentiment index thus far through 2013 is that the fears of Irish consumers are slowly easing, even if the current level of the sentiment index still suggests the ’feelbad’ factor hasn’t disappeared," he added.