Consumer confidence is at its highest level since the recession

At the end of last year, consumer confidence was at its highest level since the recession, and the Republic is now the sixth most confident country in Europe, according to the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions.

The Republic’s Consumer Confidence Index score, which measures attitudes each quarter on topics including personal finances and job prospects, hit 100 in the final two quarters of 2016, the first time it has reached this mark since the last quarter of 2007.

A score over 100 indicates degrees of optimism, below 100, degrees of pessimism.

The latest quarterly study points to a number of high watermarks being reached.

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It shows the proportion of Irish consumers who feel positive about their job prospects at its highest level since the recession.

The number stood at 58 per cent at the end of the year, the third highest in Europe, behind the Czech Republic and Switzerland.

Cheaper brands

Spending habits have also changed, with the percentage of people putting money aside for a rainy day falling to 59 per cent, the lowest level since the recession.

The percentage of consumers who have switched to cheaper grocery brands in order to save money – an activity often regarded as a barometer of consumer sentiment and behaviour – also hit its lowest level since the recession, with the survey putting the number on 32 per cent.

While the numbers who say they have switched to cheaper brands is falling, the numbers shopping in discount supermarkets is climbing, suggesting a significant shift in how consumers view products for sale in both Aldi and Lidl, with both moving more upmarket.

The amount of money Irish consumers spent on everyday groceries increased by a little over 2 per cent in the last three months of the year, compared with the same time period a year earlier. It was the seventh consecutive quarterly rise.

The number of consumers who told researchers that positivity about their personal finances made it a good time to make purchases stood at 52 per cent.

"Irish consumer confidence has been steadily rising for the last few years and has been stable enough to withstand recent unsettling events such as the UK Brexit and the US election," said Matt Clark, Nielsen's commercial director in Ireland.

‘Increasing spend’

“Although we’re a long way from seeing a return to the days of the Celtic Tiger, this confidence has slowly been translating into increasing spend among consumers.

“A good barometer of this is year-on-year grocery spend rising for seven consecutive quarters, plus the volume of groceries purchased jumping by its highest level for a year.

“This provides encouraging signs for the future, particularly with a flat consumer price index and ECB interest rates remaining at a record low.”

The global Consumer Confidence Index stands one point above Ireland at 101, while Europe's is 81 and Great Britain is 102. India (136) has the highest score globally, South Korea the lowest (43).

The scores are derived from Nielsen’s study, established in 2005, which measures more than 30,000 internet consumers in 63 countries.