The IIB Bank/ESRI Consumer Sentiment Index rose sharply to 68 in September from 63 in August.
The rise is on the back of consumers' more positive perception of both the future environment and current conditions. The forward-looking sub-index, the expectations index, increased to 54.4 in September from 49.6 in August. The index of current economic conditions rose to 88.3 in September from 83 in August.
ESRI economist David Duffy said that in particular consumers had become more positive about the general economic and labour market outlook over the next 12 months. He said that despite the improvement in sentiment there was some evidence that consumers remained cautious.
Austin Hughes of IIB Bank said the scale of the improvement in sentiment seen in September was surprising. 'The important aspect is that it builds on August's more modest gains. This suggests Irish consumers feel the worst is now behind them in terms of the general economic climate. In particular, the risk of widespread job losses seems to have eased slightly,' he said.
Hughes pointed to recent evidence of an upturn in the US and tentative signs of an improvement in the euro zone. He said August and September data partly reflected a correction from 'excessively gloomy' levels of sentiment in the early summer months.
