The 2013 final quarter Consumer Market Monitor, jointly authored by the Marketing Institute of Ireland and the UCD Michael Smurfit Graduate Business School, demonstrates that consumer confidence is at an “exceptionally high level”, complemented by positive reports on employment, peaking retail figures, and an increase in property sales.
Consumer confidence rose considerably throughout 2013, with purchasing assertion up five points in the first half of 2013, compared to that identical period in 2012.
Professor Mary Lambkin of UCD Smurfit Graduate School of Business, and one of the authors of the report, noted that it “was appalling how far it sank, to about -30 in the bad times.”
However, the second half of 2013 witnessed an increase, achieving a seven-year high point of +5 in December. This successful momentum continued into 2014, with consumer confidence reaching +10 in January 2014.
The Monitor bases its review on the average consumer, which examines economic variables such as the purchaser’s income levels, taxes, interest and exchange rates which inevitably effects consumer confidence with a domino effect across consumer behaviour including purchasing, saving and borrowing. The survey is conducted throughout every country in the EU, every month.
The report also consists of six questions posed to the consumer regarding their general economic situation. It is based on a compilation of data from the Central Statistics Office (CSO), Central Bank, the European Commission, and various other secondary sources.
Prof. Lambkin said, “The whole point of our consumer market monitor is that we bring together data from absolutely loads of different sources to give a composite view. Our contribution, you could say, is by bringing all these things together and seeing in the round what they add up to.
“Also, by tracking them over a long period of time, you get to see the big picture as opposed to what happened just last month, which is what you usually read. Our unique contribution is to try to turn that data into useful information by putting it all together and by presenting it in a format where the trends are really visible.”
Lambkin also reflected enthusiastically over the student input into such a project. “What’s nice is the collaboration with students. That it’s a group of students each quarter from the Master Marketing Practice who do the actual compiling of the data for me. It’s a very nice example of what can be achieved between staff and students collaborating together.”
Explaining how these figures mean good news for the Irish economy overall, Lambkin continued, “Consumer spending accounts for over 60% of GNP in Ireland and is a critical factor in driving any recovery of the economy.
”Consumer spending is affected by the combined influences of how much money people have available to spend coupled with their confidence in spending it. Disposable incomes for households are still under pressure, but a number of factors have led to an increase in consumer confidence.”
Lambkin credited “positive news in the employment and property markets, strong retail sales in December, better economic stability following our exit from the bailout and an easing of fears about austerity measures” as the main reasons behind such an increase in the consumer confidence index.
Tom Trainor, Chief Executive of the Marketing Institute of Ireland, concluded, “Improvement in the jobs and property markets, combined with perceptions that the economy is improving since our exit from the bailout, are contributing to consumers’ willingness to spend more. While there is a sense that the overall economy is improving, disposable incomes and personal finances are still a major concern for many.”