Consumer sentiment at highest level since 2001 - KBC Bank Ireland/ESRI

Monday 08 February 2016 19.26
The KBC Bank Ireland/ESRI Consumer Sentiment Index climbed to 108.6 in January from 103.9 the previous month
The KBC Bank Ireland/ESRI Consumer Sentiment Index climbed to 108.6 in January from 103.9 the previous month

Consumer sentiment surged to a 15-year high in January, a survey showed today, a boost for government parties pinning their re-election hopes on a strong economic recovery.

The KBC Bank Ireland/ESRI Consumer Sentiment Index climbed to 108.6 in January from 103.9 in December, its highest level since February 2001.

"The strongest element of the January results was in relation to purchasing intentions," KBC chief economist Austin Hughes said. 

"For the first time since 2006, slightly more consumers reported an improvement rather than a deterioration in their personal finances over the past year," he stated.

The economist said that while the survey suggested consumers were not blind to worries about the health of the global economy, 62% envisage a stronger economy in the next 12 months with only 13% expecting weaker conditions.

But this should not be read as implying a surge in Irish households' spending power is underway, Mr Hughes cautioned.

He said that many consumers are still feeling the effects of the crisis and years of austerity, something opposition parties have been highlighting in the run-up to the election.

"The survey details hint why, ahead of the election, promises of tax cuts and/or increased public spending might seem attractive," Mr Hughes said.

"For a significant number of households, the promise of fiscal measures that at least partly reverse the pain of the downturn may be seen as the main source of hope for the future," he added.