Sunny July boosts sen­ti­ment

The Irish Times - - Business News - LAURA SLATTERY

Con­sumer sen­ti­ment re­cov­ered in July to its high­est level since March as sum­mer sales and hol­i­days boosted spend­ing plans, ac­cord­ing to the lat­est in­dex from KBC Bank Ire­land and the Eco­nomic and So­cial Re­search In­sti­tute.

Fine weather may also have ex­erted a “mod­est” pos­i­tive in­flu­ence on the mood of con­sumers, said KBC Bank Ire­land chief econ­o­mist Austin Hughes.

“Our cal­cu­la­tions im­ply that, in most cir­cum­stances, weather isn’t a key driver of the eco­nomic mood of Ir­ish con­sumers,” Mr Hughes said. “How­ever, ex­cep­tion­ally favourable weather con­di­tions like those ex­pe­ri­enced in Ire­land of late may well have caused more con­sumers to see their eco­nomic glass as half full rather than half empty.”

The bad news is that this ef­fect is likely to be only tem­po­rary. The like­li­hood is that a re­turn to more nor­mal weather con­di­tions will prompt a “some­what cooler” as­sess­ment of the eco­nomic cli­mate .

The in­dex rose to a read­ing of 107.6 in July from 102.1 in June, which rep­re­sented the strong­est monthly in­crease since Jan­uary and the high­est level since March.

There was a sharp in­crease in pur­chas­ing plans, re­flect­ing the sum­mer sales, the new 18-2 car reg­is­tra­tion plate and hol­i­day spend­ing. The sec­ond-largest im­prove­ment in the sur­vey was in con­sumers’ as­sess­ments of how their house­hold fi­nances had evolved.

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