Consumer morale lifts in March

Irish consumer sentiment improved marginally in March with respondents less pessimistic about their employment prospects and the outlook for the economy, according to a new survey.

While consumers were still concerned about their personal finances, the survey noted that the fears observed late last year were receding.

The KBC Bank Ireland/ESRI Consumer Sentiment Index rose to 60.6 last month, up from 57.0 in February, and the strongest since last October. The rise brings the three-month moving average to 58.1. Any reading over 50 indicates a growth in confidence.

Easing concerns about the prospects for the euro zone have also lifted consumer spirits.

“The fact that the EMU collapse threatened late last year did not materialise is probably the key element in the recent turn in sentiment but a steady stream of new job announcements may also be playing an important role,” the report said.

“There has been a marked decrease in the volatility of the index over recent months, which is likely a reflection of the greater stability in Europe following the successful restructuring of Greek debt,” ESRI economist Cormac O’Sullivan said.

KBC Bank Ireland economist Austin Hughes said although conditions remained difficult, the modest improvement in the index suggested there were tentative signs of improvement in some areas of the Irish economy.

“The general tone of the survey remains fairly downbeat as might be expected but it does seem consumers feel the prospects for the Irish economy and for jobs are not quite as bad as they had feared,” he said.

“While they sense some improvement in the general economic outlook, household finances remain under severe pressure.

“This means that the buying climate remains poor. With incomes continuing to be squeezed, it is difficult to see consumer confidence boosting domestic spending anytime soon,” he said.