Irish Consumer Confidence Surges Ahead

In a sign that the recovering European periphery countries are converging with the economically stronger core nations, the Irish Consumer Confidence numbers for the month of April came in at an impressive 87.2, this represents a further increase in sentiment from the previous month’s 83.1.

This high Consumer Confidence number from KBC Bank Ireland and the Economic and Social Research Institute comes with a caveat. Ireland is recovering from a very weak economic position and as such the positive reading must be considered in these relative circumstances. The highest number since the beginning of 2007 is representative of the beginning of a moderate recovery from a particularly low economic base and as such should not be taken as a major upsurge in confidence.

Looking closer at this survey it can be seen that 51% of those that responded displayed confidence that the economy will further improve over the remainder of this year. More notably the number of individuals that feel the Irish economy will further deteriorate has now fallen from 24% to just 14%.

The consumer market monitor further shed light on the first quarter of this year’s recovery in Ireland. The headline findings are that retail sales have dramatically picked up despite the fact that disposable incomes have sharply fallen off. Household debt has fallen back a little but Irish households still remain among the most indebted in Europe, the typical Irish household bears debt equivalent to 197% of their Gross Domestic Income, this compares to average figures from the US and UK of 126% and 137% respectively.

The pick up in retail sales and the beginning of a revitalization in the construction sectors are contributing to some job growth in the Irish economy. Unemployment is at the European average of 11.7% but expected to fall a further 1% over the coming year while GDP growth is expected to come in above 2%.