Irish consumers upbeat on recovery but finances still tight

The disparity between consumers’ feelings towards the economy generally and their own financial position persists despite recent indications that people are beginning to feel the recovery in their pockets.

The Central Bank yesterday forecast consumer spending to rise by 2.2% this year, similar to earlier projections by the ESRI which also predicts consumers to have a little more disposable cash to spend, as opposed to last year.

Despite these projections, consumers remain split down the middle in terms of their personal finances, with 24% expecting an improvement in the year while an almost identical proportion are facing into a tougher financial situation.

The figures are contained in the latest KBC/ESRI consumer sentiment index, which increased to 97.8 last month from 96.1 the previous month.

The results showed while respondents to the survey remain extremely positive in their outlook for the broader economy but are less certain of their own situations.

Surprisingly, attitudes towards the jobs market showed a significant negative swing. This could be attributable to a statistical blip which will be erased in the next survey but remains interesting nonetheless.

The balance of views on employment remain solidly positive but negative views jumped from 15% to 25%, a large single month increase.

Positive views decreased slightly from 48% to 45%.

Although the survey period saw the announcement of layoffs at UPC, there were also a significant number of new job announcements, the release of encouraging official employment statistics for the final quarter of 2014 and the continuing monthly decline in numbers on the live register.

Again, the report’s authors say, this does not indicate that people anticipate higher unemployment levels in a years time but rather represents another sign that consumers are struggling to reconcile the economic revival with recovery in their own lives.

Taking a wider view of the economy, respondents sentiment recovered to a near nine-year high recorded in January with with 62% anticipating further pick-up while just 13% are forecasting a deterioration.