Consumer confidence reaches highest level since 2007

Consumer sentiment continued to gain in December, new data showed today, reaching its highest level since June 2007.

Fears about the economic outlook eased over the month, and households were more upbeat about their financial situation, the survey found.

The overall KBC Ireland/ESRI Consumer Sentiment Index increased to 79.8 in December up from 71.0 in November, with the three-month moving average up from 73.4 to 75.7.

“December’s strong performance is reflected across all categories,” said ESRI’s Kevin Timoney. “Forward-looking views on the economy over the coming 12 months improved to a seven-year peak.”

The survey showed a rise to 72.7 in the index of consumer expectations for December, while the index of current economic conditions reached 90.3, up from 80.2 in November.

KBC Bank Ireland’s Austin Hughes said the “driving force” behind the improvement in Irish consumer sentiment through the year was an easing in fears about the outlook for the Irish economy, helped by ireland’s exit from the bailout in December.

“There also seems to be some sense in the December survey that consumers feel the worst may be over in terms of the impact of austerity measures on their household finances,” he said.

“The details show that a majority of consumers are now positive about the outlook for the Irish economy and the prospect for jobs.”

However, he warned growth in consumer spending could be limited as the number of consumers expecting their personal finances to worsen in the coming year was more than twice that expecting an improvement.