Consumers still in buoyant mood

IRISH consumers have remained in cheerful mood over the new year period with the latest IIB Bank/ESRI consumer sentiment index showing a fourth consecutive monthly increase in January.

The index rose to 106.2 in January, up from 98.2 in December itself a good month in terms of consumer outlook.

Christmas sales, a strong property market and a high number of car sales combined to trigger a significant improvement in the buying climate.

One-in-two consumers feel this is a good time to buy 'big-ticket' items only one-in-ten disagreed, according to the index and IIB claims we are beginning to see the impact from SSIA funds, which are due to start reaching maturity this year.

According to Austin Hughes, chief economist with IIB Bank: "Irish consumers have become notably more price conscious of late. As a result, they, like their US and UK counterparts, seem to be inclined to delay spending on big ticket items until prices are cut at sales time.

"There's also been a dramatic increase in retailing capacity across Ireland in the past decade, which has ensured that stores must compete aggressively."

Mr Hughes said Ireland's buoyant property market also played a part in positive consumer outlook last month.

"An increase in house building and sales activity in recent months would generate demand for home furnishings and engender confidence.

"If the property market was a positive influence on sentiment last month, it would be particularly encouraging because there were a number of fairly gloomy commentaries on the housing market published towards the end of last year. Clearly, these have had little impact on consumer sentiment towards property," he said.

He said the rise in monthly mortgage payments hasn't dented consumer sentiment and suggests that any likely European Central Bank interest rate hikes won't have a major effect on the Irish economy or the property market here.