Consumer sentiment rose sharply in September, according to a survey by KBC Bank Ireland and the ESRI, as optimism grew about the economy ahead of Budget 2015.
The KBC Bank Ireland/ESRI Consumer Sentiment Index stood at 92.8 last month, according to the survey, compared to 87.1 in August.
This puts sentiment at its highest point since the start of 2007, according to the bank.
KBC Bank’s chief economist Austin Hughes said much of the rise could be attributed to domestic factors, as similar surveys in other countries had not seen similar gains.
This could be a reaction to the economy’s strengthening recovery, he said, as well as the anticipation of a “less threatening” budget in a week’s time.
The survey period coincided with a number of positive economic stories, though it came ahead of the recent upward revision of Ireland’s GDP forecasts for this year and 2015.
Almost 60% of those asked said they expected economic improvement in the coming year, compared to 52% in August.
Fewer people also anticipated that their financial situation would worsen in the year ahead, with suggestions of a less austere budget contributing to that.
The number of people that expected unemployment to fall further in the year ahead fell, however, though the level of negative sentiment around the jobs market also declined.
“Clearly, consumers are moving into a more positive frame of mind but it remains the case that a majority anticipate continuing pressures on their household finances,” said Mr Hughes.
“For sentiment to continue to improve would likely require both the persistence of a healthier trend in the Irish economy and some broadening of the reach of the recovery.”
The next consumer sentiment survey is due to be completed before Budget 2015 is delivered, with the bank expecting further growth on the back of recent upgrades in various bodies’ GDP forecasts.
