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Ireland's consumer sentiment at highest level in seven years

Staff writer |
Ireland's consumer sentiment index strengthened in February to the highest level in nearly seven years, according to KBC Bank Ireland and ESRI index.

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The index, produced jointly from KBC Bank Ireland and the Economic and Social Research Institute (ESRI), showed that the index rose to 85.5 in February, from 84.6 in January and 59.4 in February last year. The 3-month moving average advanced to 83.3 in February from 78.5 in January.

Although the monthly change was slight, February's reading was the strongest in nearly seven years.

Austin Hughes, chief economist with KBC Bank Ireland, said the February reading should be seen as consolidating recent gains in the sentiment index.

"It suggests that consumers are increasingly confident, that the Irish economy and the outlook for jobs are improving and, at the margin, pressure on household finances may be easing slightly. However, consumers are likely to need clearer evidence that things will get notably better for their households before they are willing to scale up their spending," Mr. Hughes said.

"We think Irish consumer spending will improve this year but we don't expect the sudden step-up that this result might imply. We will watch this component very closely for any sign that consumers are set to spend more freely but we wouldn't be surprised by some correction next month."

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