DUBLIN (Reuters) - Irish consumer sentiment reversed the slide recorded for much of 2016 when it rose at the fastest pace in seven months in January, a survey showed on Friday, but its authors cautioned that most of the rebound could be caused by seasonal factors.
Ireland’s economy looks set to have outgrown the rest of the European Union for the third straight year in 2016, but that failed to spur on sentiment last year, with many consumers experiencing an uneven recovery.
Having fallen to its lowest level since early 2015, the KBC Bank Ireland/ESRI Consumer Sentiment Index jumped to 103.1 in January from 96.2 in December and back towards the 15-year high of 108.6 hit a year ago.
The improvement in confidence mirrored gains in the United States and euro zone, KBC chief economist Austin Hughes said, pointing to the seasonal tendency towards a stronger reading at the start of the year.
Hughes estimated that the post-Christmas seasonal bump could be responsible for around three quarters of the month-on-month rise in the index. He also cited a possible “relief rally” that the election of U.S. President Donald Trump was not immediately followed by the widely feared economic and financial fall-out.
“The stronger confidence reflects a number of influences, some of which may be short-lived and others of which give some grounds for optimism about Irish economic prospects in the year ahead,” Hughes said.
“Our sense is that sentiment readings may remain choppy in coming months, reflecting an Irish consumer who is facing into a quite uncertain 2017.”
Reporting by Padraic Halpin, editing by Larry King