Ireland’s consumer confidence increased eight points to an index of 77 in Q4 2013, the highest score since 2008 and four points above the European average (73), according to the latest figures from Nielsen. The Irish increase was the highest of 32 European countries measured, with all three components which form the index recording improvements, especially job prospects and personal finances.
Meanwhile consumer confidence fell in 18 of 32 markets in Europe in the fourth quarter with the biggest index declines coming from the previous quarter’s biggest gainers. Confidence declined eleven index points in Portugal (44), ten points in France (51) and six points in Belgium (75) compared to Q3. Nine out of ten countries with the lowest consumer confidence scores hailed from Europe, with Portugal (44), Croatia (44), Italy (44), Greece (45) and Slovenia (44) at the bottom. The UK score declined three points to 84.
Significant increase in optimism regarding job prospects and personal finances
Ireland posted a buoyant increase in job prospects for 2014 as the nation’s unemployment rate drops to its lowest level since May 2009 following eighteen consecutive monthly decreases. The percentage of Irish people who think job prospects are good or excellent increased nine percentage points compared to Q3 2013 to 26%. While those who feel their personal finances over the next twelve months are good or excellent also increased from 29% in Q3 2013 to 40%. A slightly lower increase was evident in the readiness to spend area as 29% say it is a good time to buy the things they need or want, compared to 24% in Q3. This emphasises that despite improvements in optimism there remains a reluctance to spend freely.
Softening of behaviour in saving strategies
Irish consumers have made many sacrifices in order to save on their household expenses; however on the latest quarter there is evidence of a softening of this behaviour with those switching to cheaper grocery brands down ten percentage points at 67% and those saying they have cut down on out of home entertainment down nine percentage points at 52%. Meanwhile the top three biggest concerns occupying the minds of the Irish consumer are unchanged on the previous quarter with job security topping the list followed by the economy and increasing utility bills.
Positive outlook for 2014
This quarter there is evidence of less pessimism regarding recessionary sentiment with 87% of Irish consumers claiming we are still in a recession, compared to 93% in Q3 2013. Furthermore, there has been a decline in the numbers who feel we will still be in a recession in twelve months at 66% (down three percentage points on Q3 2013). “In Ireland, unemployment continues to fall and is now at its lowest level since 2009, continued low inflation and interest rates spell good news for households,” said Maureen Mooney, Commercial Director, Nielsen Ireland. “Reports of climbing property prices are another indicator of a country moving forward and a positive sign for the start of 2014.”