Irish Economy 2014:
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.
The Consumer Sentiment Index
comprises two sub-indices; an index of consumer expectation that focuses on how
consumers view prospects over the next 12 months and an index of current
economic conditions, focusing on consumers’ present situation.
The Index of Consumer Expectations is based on consumers’ perceptions of their
future financial situation, their economic outlook for the country as a whole
and employment expectations. This sub-index decreased slightly to 75.6 this
month, from 75.8 in January.
The Index of Current Economic Conditions is based on how consumers feel about
their current financial circumstance compared to 12 months ago, as well as their
perception of the current buying environment for large household purchases. The
Index of Current Economic Conditions increased to 100.2 from 97.6 in January.
Each of the Consumer Sentiment Index, the Index of Consumer Expectations and the
Index of Current Economic Conditions have now improved to a peak not seen since
The data was obtained from telephone interviews during the first two weeks of
the month with around 800 completed questionnaires. The data were re-weighted in
line with gender, age and level of educational attainment to ensure the data is
fully representative of the national population of adults. Each index is
calculated by computing the relative scores (the percent giving favorable
replies minus the percent giving unfavorable replies (the balance), plus 100)
for each question used in the different indices. Those who reply “Don’t Know”,
“Remain the same” are excluded from the index calculations. Each relative score
is rounded to the nearest whole number. The sum of the relative scores is then
divided by the base period total for each index.
Commenting on the results Kevin Timoney, ESRI, said:
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.
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.
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.”
addition, Austin Hughes, KBC Bank Ireland, added:
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.
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.”
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