Householders now less gloomy about finances
CONSUMERS started the year by being less gloomy about their finances.
The uplift in consumer sentiment last month reversed a sharp decline in December when householders appeared to be terrified about their financial prospects, according to the KBC/ERSI consumer sentiment index.
However, householders were still braced for another tough year due to tax hikes and charges and rising prices.
KBC's Austin Hughes said consumers remain nervous and cash-constrained and it was widely recognised that 2012 will be a difficult year in terms of more downward pressure on their living standards.
The survey shows Irish consumers were still fairly downbeat about their own financial prospects and those of the Irish economy.
The KBC Bank Ireland/ESRI consumer sentiment index rose to 56.6 in January from 49.2 in December. The January reading was very similar to last year's average of 55.8 but remains far below its long-term average of 87.6.
The pick-up in sentiment was boosted by the buying climate due to Christmas sales, while there was also a tentative easing in Budget-related worries.
"The January survey results suggest sentiment remains very fragile, but Irish consumers seem to have discounted quite a lot of bad news in terms of what 2012 may hold," Mr Hughes said.
"The key unknown is whether consumers are influenced more by developments such as the recent positive review of the Irish economy by the troika, or by their assessment of the toll that the ongoing adjustment is taking on the economy in general, and their pockets in particular," he added.
Cormac O'Sullivan of the Economic and Social Research Institute (ESRI) said: "Consumers are starting 2012 with a brighter disposition with sentiment improving from the depressed figures seen at the end of 2011."