Irish shoppers expect the economy to improve and unemployment to fall further this year. Consumer sentiment last month was at its highest level in almost seven years after an upbeat December.
The latest KBC-ESRI Consumer Sentiment Index increased to 84.6 when compared to 64.2 a year ago. While the 3-month moving average increased from 75.7 last month to 78.5 in January.
It says that a stronger buying climate was responsible for much of the monthly gain, as consumers took advantage of Christmas sales.
It estimates that this element accounts for about 70% of the rise in the index between December and January. It also seems that confidence in the economic outlook is continuing, as fears about household finances are starting to ease.
But the index says while it would not be correct to suggest that conditions are now back to 'normal', it suggests that the trend in data through the past year is consistent with a sense that Irish consumers are gradually recovering from the recent difficulties.
It believes that this is likely to be a lengthy and 'choppy' process, rather than a smooth pick-up in sentiment.
Chief Economist with KBC Bank is Austin Hughes.
Meanwhile property consultants Savills Ireland says that, for the first time since 2007, all indicators are now pointing to a stabilisation in retail conditions.
In its latest commentary on the retail property market, Savills notes that personal consumption expenditure, retail sales and VAT receipts all appear to have stabilised and are now beginning to show improvement.
Economist and Director of Research at Savills Ireland, Dr. John McCartney, says this is due to a strong recovery in the labour market.
"Employment has risen by over 3% in the last year - a remarkable growth rate by international standards - and the private sector is creating almost 5,000 new jobs per month. This is feeding through to improved consumer confidence and is beginning to be seen at the tills" he said.
"The household savings ratio has halved since its peak in 2009 and, at 8.4%, is currently well below the EU average. While consumers are undoubtedly still cautious, this does now appear to be contributing to stronger retail sales, with overall turnover up 1.6% in the year to November" he added.
However, Savills warns that the recovery is not uniform across all regions and store types.
