Trump helps boost Irish consumer confidence

Shoppers had no January blues...

Irish consumer sentiment recovered in January - rising at its fastest pace in seven months.

The KBC Bank Ireland / ESRI Consumer Sentiment Index rose to 103.1 - that's still below the 108.6 high recorded a year ago but it suggests that caution caused by the result of the UK's EU membership referendum has started to ease.

The report notes that January's figures could be buoyed by sale season and post-Christmas positivity and that its sense "is that sentiment readings may remain choppy in coming months reflecting an Irish consumer who is facing into a quite uncertain 2017."

Rather than being a negative - it comments that the election of Donald Trump could be pushing the index up:

"The mood of Irish consumers in January may also have been lifted by the same forces that saw healthier confidence readings in a range of other countries last month. In the US, this reflects a continuing economic and market honeymoon for the new Trump presidency which produced the strongest US sentiment reading since January 2004 as well as repeated new highs in equity markets," it states.

This could also be a "relief rally" as the economic implications of the UK's decision to leave the EU have not led to the severe shock that some had feared. Ireland is on-track to remain the fastest-growing economy in the EU in 2017.

Austin Hughes, KBC Bank Ireland, commented, "There is also a tendency to focus attention away from economic news over the festive period. However, these influences tend to fade quite quickly, implying the risk of softer readings in the next month or two."

On external factors he stated, "The January survey may also be picking up some spill-over effects from the ‘honeymoon’ period the Trump administration is enjoying with financial markets. As was the case with Brexit there were widespread fears that an economic apocalypse might quickly unfold. Instead, financial markets have improved and much of the recent economic news in Ireland and elsewhere has been better than expected."