Consumer confidence is at never-before seen levels significantly higher than that of neighbouring countries, a new report claims.
Soaring levels of positive consumer sentiment have begun to drive increased spending which is in turn creating employment throughout the economy, the report from UCD Michael Smurfit Business School finds.
The school’s Consumer Market Monitor shows strong evidence of a broad-based recovery with consumer confidence rising to a score of plus 12 on the monitor; a record level surpassing those seen during the boom.
“Consumer spending accounts for over 60% of GNP in Ireland and is a critical factor in driving recovery in the economy... Disposable incomes are at last beginning to show modest growth as a result of jobs growth and this coupled with greater availability of credit is leading to accelerated spending on many categories of goods and services. Overall, retail sales have turned a corner and are back on a growth path, although from a very low base,” UCD Smurfit School professor of marketing, Mary Lambkin said.
In one indication of improving consumer confidence, sales of new cars have experienced a major turnaround, up 30% on last year.
General consumption expenditure was also up 1.2% in the first half of the year with Vat receipts to the end of October 8.2% ahead of last year and almost 4% ahead of target.
Retail sales continue to struggle, however, with marginal improvements seen to date.
The increasingly optimistic outlook of many consumers is strongly linked by steadily improving employment figures which are now beginning to have a positive effect on disposable incomes. Unemployment levels in October were at the lowest levels since 2009.
Tom Trainor, CEO of the Marketing Institute, said: “We have been waiting for the green shoots of economic recovery for a long time in Ireland and especially in the consumer economy which has been particularly badly damaged in the recession. It is very heartening to see definite evidence that this sector is now recovering and this positive momentum will help strengthen many businesses and allow them to grow and expand employment.”
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