A recovery in consumer sentiment in April is mainly due to a less pessimistic outlook for employment, a survey published today suggests.
The IIB Bank/ESRI Consumer Sentiment Index improved to 83 in April, compared to 78.5 in March, but many consumers retain a "feel-bad" factor about the prospects for the economy.
Austin Hughes, IIB Bank
Economist David Duffy of the ESRI said the results for consumer sentiment show that there was some recovery in April from the weakening in March.
"The improvement is mainly due to a more positive perception by Irish consumers of future prospects," he said.
"Although sentiment has improved, the results suggest that any recovery in confidence remains tentative. For example, consumers continue to have some concern about the economic outlook and also their current financial situation."
IIB Bank chief economist Austin Hughes said the main driver of the rise in confidence was a "slightly less pessimistic assessment of the outlook for employment".
"While consumers are still worried about job security, fears of a complete jobs meltdown seem to have eased," Mr Hughes said.
He added that consumers were also more optimistic about their household spending power in the coming year. "This probably reflects the impact of pre-election promises and the fact that more than half a million SSIAs mature during April."
IIB said it was "remarkable" that the maturing SSIA funds had not created a more pronounced "feel-good" factor across the Irish economy.
"Concerns about Irish economic prospects, the housing market and inflation mean many consumers are worried.
. . . As a result, most consumers will treat their SSIAs as 'rainy day' savings rather than a windfall that can be spent without care," said Mr Hughes.