Consumer Sentiment strengthens in February
The overall KBC Ireland/ESRI Consumer Sentiment Index increased 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.
Commenting on the results Kevin Timoney, ESRI, said
•†† †“Consumer Sentiment improved further in February, rising to 85.5 from 84.6 last month. The 3-month moving average increased for the tenth consecutive month, to 83.3 from 78.5 in January.
•†† †“The purchasing environment for large consumer goods advanced to a new series peak in February. As a result, the index of current economic conditions increased to a seven-year high of 100.2, from 97.6 last month.
•†† †“Meanwhile, the index of consumer expectations was slightly lower in February than in January, decreasing to 75.6 from 75.8. Forward-looking views on economy and the labour market over the coming year were less positive this month. This was partly offset by an improvement in expectations for future household finances.”
In addition, Austin Hughes, KBC Bank Ireland, noted:
•†† †“We think 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.
•†† †“The largely unchanged reading in February isn’t surprising but the details aren’t quite as expected. Usually, February sees a marked pull-back in spending plans whereas last month saw a small rise in this element of the survey. 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.”