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Irish consumers start 14 in upbeat mood

Tuesday, February 04 12:09:01

Irish consumers began 2014 in a much more positive mood amid improved sentiment towards the economy and jobs and after Ireland exited the bailout in Devember, the latest KBC Ireland/ESRI Consumer Sentiment Index showed.

The index increased to 84.6 in January, from 79.8 in December and 64.2 in January 2013.

The 3-month moving average increased from 75.7 last month to 78.5 in January.

Every year of the survey has begun with a boost to the buying climate for durable consumer goods, supported by the January sales. This month saw the component improve to a four-year peak, Kevin Timoney of the ESRI think-tank said.

"Improved perceptions for the labour market over the coming year also contributed to the increase in sentiment. However, household perceptions of their current financial situation worsened somewhat compared to December," he added.

The index of consumer expectations improved from 72.7 in December to 75.8 this month. The index of current economic conditions jumped from 90.3 to 97.6.

Austin Hughes of KBC Ireland said Irish consumers began 2014 in a more positive mood as it seems they expect the Irish economy to improve and unemployment to fall further in the coming year.

"The sentiment index is now in line with its long term average for a survey that stretches back eighteen years. We donít think this means consumers see current conditions as Ďnormalí. The circumstances facing Irish consumers have varied so much through this period that we canít interpret the January reading in this way. However, last monthís results suggest consumers sense that some improvement from the difficulties of the past few years is taking hold," he added.

"About 70pc of the rise in the sentiment index between December and January is due to a largely seasonal boost to spending plans that reflects the influence of Christmas sales. There is likely to be some reversal of this factor in the February data that might even mean a weaker reading overall this month. However, we think the underlying trend in consumer sentiment is still modestly positive and any setback is likely to be temporary."