Consumers more willing to spend

Consumers are willing to spend more money as the KBC Ireland/ESRI hits its highest level in six years as the country exits its bailout and the jobs market improves.

The KBC Ireland/ESRI Consumer Sentiment Index increased to 76.2 in October, from 73.1 in September. The three-month moving average improved from 69.4 to 72.0, continuing its upward trend since April.

The ESRI’s Kevin Timoney said the improvement is down to a continuous positive feeling since April.

The report cautiously listed a range of factors that might be influencing people to increase their spending, from low inflation to an increase in house prices.

“It could also be influenced by exceptionally low inflation and the presence of special offers aimed at a very cautious consumer. At the margin, it may reflect some influence from rising residential property values encouraging spending on decoration or refurbishment. It might simply be statistical noise and as such it may not reflect changing circumstances and could be reversed in future surveys.”

Economist with KBC Bank Ireland, Austin Hughes said that people are more confident but they are not expecting a dramatic return to boom-time conditions.