The overall KBC Ireland/ESRI Consumer Sentiment Index rose in February to 50.3. This compares to a figure of 48.7 in January, and a value of 59.4 in February 2010. The February reading remains above the all time low of 39.6 in July 2008 but it is still considerably lower than the all time high of 130.9 in January 2000.
Commenting on the results David Duffy, ESRI, said
- “Consumer sentiment improved in February, due to an improvement in the forward looking expectations index which rose to 37.8 in February, from 31.5 in January. In contrast, the index of current economic conditions weakened to 68.9 in February from 74.2 in January.”
- “Although sentiment has improved, the underlying figures suggest that any recovery in confidence remains tentative. Part of the improvement in sentiment is due to a move from a negative to a neutral outlook by respondents, suggesting a cautious outlook by consumers. The underlying message from the analysis is that consumers remain cautious in the present circumstances.”
In addition, Austin Hughes, KBC Ireland, noted:
- “The slight rise in consumer sentiment in February is surprising in the light of a lot of bad news during the survey period. The run-up to the election focussed heavily on Ireland ’s economic problems and we also saw downward revisions to growth forecasts as well as further increases in energy and food prices. In these circumstances, the marginal increase in sentiment hints that Irish consumers have prepared themselves for a lot of bad news. They may also have responded to evidence of stronger global growth as well as tentative signs of improvement in a variety of domestic economic indicators.“
- “It should be emphasised that even after the slight improvement seen in February, current sentiment readings are far below the long term norm. So, it is clear that Irish consumers are fairly gloomy at present and, of course, they face further problems. In particular, looming ECB interest rate increases could take a further toll on confidence in the months ahead. That said, February survey results hint at some resilience in sentiment which might suggest spending may not be quite as weak as feared.“
Note:- Since May 2008 the KBC Ireland/ESRI Irish consumer sentiment survey was prepared using a slightly different methodology. While this may have a minor impact on the precise numerical estimates of various survey components, it should not have any significant effect on the broad trend reported.
Published with the permission of David Duffy of the ESRI
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