Consumer confidence in Ireland is at its highest level in a year according to a recent survey, suggesting that consumers feel the economy may be recovering. However, consumers remain reluctant to increase their spending until they are certain the recovery will last. While over half of consumers expect the Irish and world economies to improve or stay the same in the next six months, most are not yet willing to spend more on entertainment, groceries or holidays. Younger consumers and those in higher social classes are most optimistic and likely to increase spending first if signs of recovery continue. Policymakers must reinforce this growing consumer optimism to help drive Ireland's exit from recession.

1. The Road to Recovery? Credit Crunch Tracking February 2010

3. Consumers believe the Irish Economy is improving.

5. Higher expectations seen among the youth, the retired and those born outside of Ireland.

6. Expectations for the Irish economy 6 months from now % Stating they believe it will be the same or better (3-5) 18-34 % 35-44 % 45-64 % AGE 65+ % Any % None % CHILDREN Male % Female % GENDER ABC1 % C2DE % SOCIAL CLASS TOTAL % COUNTRY OF ORIGIN Ireland % Other %

7. A positive outlook for the World economy, is driving the Irish outlook.

9. Expectations are also increasing for housing and job market… but many still fear it may get worse

10. Much better (5) Much worse (1) Average The Housing Market 6 months from now? Job security 6 months from now? 2.29 Stay the same (3) Slightly better (4) Slightly worse (2) 1.85 20 11 1.86 1.53 13 7 2.32 1.89 23 14 2.43 26 2.24 20 NET Same/Better (3-5) 33 19 21 10 37 22 43 34 2.59 36 53 2.34 27 40 May ‘ 09 % July ‘ 09 % Oct ‘ 09 % Feb ‘ 09 % Feb ‘ 10 % May ‘ 09 % July ‘ 09 % Oct ‘ 09 % Feb ‘ 09 % Feb ‘ 10 % How do you expect the Housing and Job markets to fare in the next 6 months?

11. The expected tough budget did not materialise for most consumers, reducing the perceived impact of the recession on them personally

13. 18-34 % 35-44 % 45-64 % AGE 65+ % Any % None % CHILDREN Male % Female % GENDER ABC1 % C2DE % SOCIAL CLASS Expected Personal Impact of Recession – Net High Impact (8-10) TOTAL % The biggest change in impact appears to be among middle class families, who have become far less negative about the impact of the recession

14. The percieved impact on monthly spending, lifestyle and job security also decline with increased optimism.

15. Monthly Spending Average Your Way Of Life 5.6 5.3 5.7 5.4 6.2 5.9 5.0 4.6 5.9 5.6 6.7 6.4 High impact (8-10) Limited Impact (1-3) Some Impact (4-7) 54 53 48 56 41 49 53 50 51 55 41 45 July ‘ 08 % May ‘ 09 % Feb ‘ 09 % Sept ‘ 08 % July ‘ 09 % Oct ‘ 09 % July ‘ 08 % May ‘ 09 % Feb ‘ 09 % Sept ‘ 08 % July ‘ 09 % Oct ‘ 09 % 5.9 49 Feb ‘ 10 % 5.6 51 Feb ‘ 10 % Expected Impact of Recession on….

16. Average Full-time Workers Part-time Workers 5.0 5.1 4.7 5.4 5.6 5.7 4.1 4.5 4.9 6.5 5.6 5.7 High impact (8-10) Limited Impact (1-3) Some Impact (4-7) 39 36 37 38 40 36 29 36 38 44 40 34 July ‘ 08 % May ‘ 09 % Feb ‘ 09 % Sept ‘ 08 % July ‘ 09 % Oct ‘ 09 % July ‘ 08 % May ‘ 09 % Feb ‘ 09 % Sept ‘ 08 % July ‘ 09 % Oct ‘ 09 % 4.7 34 Feb ‘ 10 % 5.7 34 Feb ‘ 10 % The perceived impact on job security also improves, but the fear of job loss remains...

18. Concerns About The Future Lower Prices/ Cost-of-Living Not Reduced Spending Lower Household Income Suggests that income is available for improved spending when consumers feel more secure! Main reason for reducing spend to date, if at all... Oct 2009 % Jan 2010 % Only a third have reduced spend due to lower household income

19. % C2DE Males Females 18-34 45-64 35-44 65+ ABC1 Age Social Class Sex TOTAL Reduced spend due to lower income... Women and the 45-64 year olds are more likely to have decreased their spend due to lower income – suggesting men and those in the older and youngest age groups are most likely to start spending again first.

21. Already increased Not likely to increase Entertainment such as going out, eating, drinking or socialising Grocery spend Consumer goods and services – e.g. hairdresser, clothes, mobile phone, gaming etc. Holidays and short breaks Likely to increase in next 6 months Likely to increase in next 12 months Oct ‘ 09 % Feb ‘ 10 % Oct ‘ 09 % Feb ‘ 10 % Oct ‘ 09 % Feb ‘ 10 % Oct ‘ 09 % Feb ‘ 10 % Likelihood to increase spend in... Some small shifts in increased spending have already occurred, but the majority remain reluctant to increase

22. But, younger age groups and higher social classes are most likely to increase spend again... % Likely to increase spend in next 12 months Entertainment Grocery Spend Consumer Goods/ Services Holidays/ Shorter Breaks Total 35 32 34 35 Gender Male 36 30 33 36 Female 35 32 34 34 Age 18-34 50 39 45 46 35-54 31 31 32 31 55-64 20 18 30 28 65+ 22 25 26 26 Social Class ABC1 36 31 34 39 C2DE 33 32 34 31