Consumers Not So Nervous About Economy
Updated : Jun 30, 2009
Consumers are less nervous about the economy despite bearing the brunt of income levies and being hit by job losses, it emerged today.
A new survey revealed while shoppers remain worried about spending, consumer sentiment reached a 14 month high this month.
Economist Austin Hughes said rises in the KBC Ireland/ESRI Consumer Sentiment Index hints the worst might be over.
“At current levels, the sentiment index is still saying that Irish consumers are fairly nervous but they seem to have drawn some encouragement from signs of ’green shoots’ abroad and very faint signs that some domestic indicators may be starting to stabilise,” said Mr Hughes, of KBC Ireland.
“It is remarkable that consumer confidence improved in a period in which the impact of higher levies was felt in pay packets and election results suggested considerable dissatisfaction with the Government.
“The rise in the sentiment index in June hints that Irish consumers may detect some progress as well as a lot of pain at present.”
The survey revealed dramatic increases in people’s assessment of the general economic outlook and job prospects.
Economists said households noticed the recent cut in interest rates on mortgage repayments, discounts by retailers, and drew some comfort that the pace of job losses might be beginning to stabilise.
However, shoppers still felt it was a poor time to make major purchases and were holding out for the summer sales.
Mr Hughes warned June’s exceptional gain to 53.4 from 45.5 in May could be reversed in the next month or two.
However the ESRI’s David Duffy said consumers were more optimistic about the outlook for the economy, labour market and household finances in the coming 12 months.