Consumer confidence on rise again

Improving economic conditions led to a boost in consumer confidence in September, according to new research from the Economic…

Improving economic conditions led to a boost in consumer confidence in September, according to new research from the Economic and Social Research Institute and IIB Bank.

The latest consumer sentiment index, published yesterday, showed a reading of 95.5, up from 93.6 in August.

The index has now been on a broadly rising trend for more than a year, save for a slight dip in August. Commentators have since dismissed this drop as a blip, but Mr Austin Hughes of IIB Bank said he remains cautious on the underlying strength of consumer confidence.

He said the detailed survey responses did not show the sort of "step-up in confidence" that would signal the return of an economic boom. During the Celtic Tiger period, the index averaged a reading of 120 points.

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Consumers displayed less confidence, for example, in their personal financial circumstances than in the economy as a whole.

The survey also showed that respondents were less upbeat on their current economic position than on their future prospects, with this aspect of the index falling back slightly in September.

Even with this better feeling on future economic conditions however, one out of every two respondents said they did not expect any real income gains in the coming year.

"A clear feel-good factor is notably absent from consumer sentiment at present," Mr Hughes said. He blamed the muted consumer mood on a combination of factors such as high debt levels and rising inflation.

"The current reading is indicative of an economy that is clearly healthy but not 'hot'," Mr Hughes said. He expects sentiment to continue improving over the coming year but on a "modest" scale.

Úna McCaffrey

Úna McCaffrey

Úna McCaffrey is an Assistant Business Editor at The Irish Times