Consumers – are you feeling more confident about the economy these days? The answer, apparently, is yes, at least according to the latest consumer sentiment index compiled by KBC Bank and the Economic and Social Research Institute.
KBC Bank was quick to note that while positive, the results from June don’t represent a major swing in Irish consumer thinking, although they do suggest that consumers here are of the belief that circumstances will improve in the Irish economy over the next year.
“Our sense is that improved consumer sentiment towards household finances reflects a number of developments throughout the survey period. Probably the most important of these was increased discussion of the possibility of a generous budget in October. Strong exchequer returns hinted at scope for some stimulus, several government ministers talked up such a prospect and warnings against an excessively generous budget stance from the Irish Fiscal Advisory Council and the ESRI further heightened media coverage of a possible ‘giveaway budget’. As a result, it would seem Irish consumers see the era of austerity as over and are increasingly alert to the possibility that a period of payback may now be beginning, ” the bank said in a release.
In terms of people’s personal financial circumstances, in May’s consumer index 17% of those who responded noted that their household finances had seen improvements in the past year, with 33% reporting a deterioration. This month’s index sees improved figures – the former figure has risen to 20% while the latter has dropped to 31%.
“It should be emphasised that the June sentiment reading does not suggest Irish consumers are particularly upbeat about their personal financial circumstances. While the June reading represents an improvement, it remains the case that notably more consumers reported tougher financial circumstances in the past year than experienced rising spending power,” the report added.
On a global scale, this increase in Irish consumer sentiment mirrors that of the UK and the US. Across the Atlantic, June has had the second highest rating recorded since early in 2007, while consumer confidence in the UK is at its highest level in 15 years this month.