Consumer confidence at 10-year record high

Consumer confidence has reached a 10-year high but the compilers of a new poll suggest it remains too early to herald a return to a “feelgood” mentality.

The latest monthly consumer sentiment survey, covering December, from KBC Bank Ireland and the ESRI shows that the strengthening jobs market and increased household spending power resulted in a modest gain in confidence, but one which ultimately pushed sentiment to the strongest point since 2006.

December’s level jumped to 102.8 from 101.7 in November and is now at its highest since a reading of 106.2 in January 2006.

However, KBC Ireland’s chief economist, Austin Hughes said: “The fact the monthly improvement in sentiment was fairly modest suggests there hasn’t been any dramatic change in the environment facing Irish consumers of late.

“However, the sentiment index has posted a new 10-year high, emphasising that consumers feel their circumstances, and those of the broader Irish economy are improving.

"The recovery is becoming more ‘real’ to them as it is now delivering more jobs and, after a lot of pain in recent years, some improvement in household spending power.”

However, while budget measures, low oil prices, and retail discounts have boosted spending power, Mr Hughes warned confidence remains relatively fragile still.

“Caution born of recent pain and continuing pressures on many household finances, together with a still uncertain global outlook mean we remain some distance from any broadly based ‘feelgood factor’ among Irish consumers,” said Mr Hughes.