Consumer sentiment in the Republic edged higher in November as greater optimism about the outlook for the Irish economy outweighed continuing concerns about household finances.
The IIB/ESRI Consumer Sentiment Index rose modestly in November to 87.9 from 86.7 in October.
The index of consumer expectations, the forward-looking index, rose from 79.8 in October to 82.9 in November.
In contrast, the index of current economic conditions declined to 95.2 from 97 in October as consumers became more negative in their perceptions of the buying climate.
"The November results show consumers are confident about the broad economic outlook but have become more concerned about their own household finances. Importantly, they feel that a healthy economy has not translated into stronger spending power for them," said Austin Hughes, chief economist with IIB Bank.
Rising interest rates and fuel costs have had an impact on consumers in 2006 and Minister for Finance Brian Cowen is in a strong position to deliver a boost to spending power in the Budget, according to Mr Hughes.
"We think the sentiment survey argues that Mr Cowen would be right to give a significant boost to household spending power in Budget 2007. Last week's employment data also suggest that the supply side of the Irish economy is sufficiently strong and flexible to ensure that a substantial Budget boost to demand won't automatically lead to markedly higher inflation."
The November survey results also suggest the Irish housing market has become more of a concern. Greater confidence in the broad economic outlook stood in contrast to a further downgrading by consumers of their personal finances in November, the report said. Just under 16 per cent think their household finances will improve in the coming year, the smallest since October 2003.
