The Economic Recovery Index August Results 2009

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Irish consumer sentiment and its impact on consumer spending

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The Economic Recovery Index August Results 2009

  1. 1. The Economic Recovery Index An Amárach Research Briefing August Index Results © Amárach Research 2009
  2. 2. 2 Timing Recovery Business Cycle Peaks & Troughs All recessions end in recovery – so will this one The biggest forecasting challenge is timing: when do we know the recession is over and recovery has started? Amárach Research has developed the Economic Recovery Index to help us track the economic cycle more closely This report summarises the ERI results for April to August 2009 The July fieldwork was conducted on 18th-24th August inclusive Amárach Research Economic Recovery Index
  3. 3. 3 A Matter of Measurement Every month we survey a representative sample of 1,000 adults online and ask them to tell us which statement ‘best describes the economic situation in Ireland right now’ Each statement corresponds to a different stage in the economic cycle Amárach Research Economic Recovery Index
  4. 4. 4 A Matter of Measurement After July’s weakening in our index, there has been some recovery, though not quite all the way back to the most recent high in June However the percentage saying the economy is ‘bad but improving’ is the highest since we started compiling the Index in April July 0% August 0% July 1% August 1% July 58% 58% August 53% 53% July 16% 16% August 20% 20% Amárach Research July 25% 25% August 26% 26% Economic Recovery Index
  5. 5. Economic Recovery Index Using the answers to the survey we have created the Economic Recovery Index, which ranges from 0 to 100 (0 = worsening recession; 100 = back to peak) The ERI improved between July and August, recovering some of the ground lost in June-July 0 2009 ERI Score 100 April 8 April May May 16 June 18 June July 15 July August August 17 Amárach Research Economic Recovery Index
  6. 6. 6 Other Sentiment Indicators from ERI Survey Percent of adults who agree with each statement: July and August 2009 Ireland will be through the I am optimistic in spite of The recession is worst of the recession the current economic affecting other people in 12 months time situation more than it is affecting me 43% 60% 61% 42% 58% 60% July August July August July August I feel financially I have started saving a lot Now is a good time for comfortable enough to more than before because young people to buy their make it through the of the recession first home recession 38% 48% 56% 47% 33% 55% July August July August July August Amárach Research Economic Recovery Index
  7. 7. 7 Mood of the Nation Did you experience any of these feeling a lot of the day yesterday? July and August 2009 58% 60% 54% 55% 45% 47% 40% 37% 23% 20% 19% 18% 18% 15% Enjoyment Happiness Stress Worry Sadness Physical Anger Pain July August Amárach Research Economic Recovery Index
  8. 8. 8 Insights & Implications The longer the recession continues the more likely it is that those not directly affected will begin to assume that they have ‘dodged the bullet’ This in turn will lead to some reduction in precautionary savings behaviour (as has happened) which should feed through into a modest increase in consumer spending However, this increase will not be sufficient in the short term to offset the negative impact of continuing increases in unemployment and reductions in after tax income Nevertheless, at some stage, the majority of consumers (and workers – who will not lose their jobs) will loosen the purse strings as they believe the economic cycle has reached the trough and moved beyond it. Amárach Research Economic Recovery Index
  9. 9. 9 About Amárach Amárach Research is a full service market research agency The questions for the Economic Recovery Index are run on our monthly online omnibus survey of 1,000 adults Keep up with Amárach’s thinking by subscribing to our free fortnightly ezine: Consumer Foresight More information at: www.amarach.com Check out our blog here: www.amarachresearch.blogspot.com Amárach Research Economic Recovery Index
  10. 10. 10 Amárach Contact Details Gerard O’Neill - Chairman Sylvia Langtree - Director Amárach Research 11 Kingswood Business Centre Citywest Business Campus Dublin 24 T. (01) 410 5200 E. gerard.oneill@amarach.com sylvia.langtree@amarach.com W. www.amarach.com B. amarachresearch.blogspot.com Amárach Research Economic Recovery Index

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