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Economic Recovery IndexAn Amárach Research Briefing

October 2017

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We have been reporting our monthly Economic Recovery Index since April 2009.

We set out eight years ago to assess the psychological impact of the recession and to chart our ‘emotional progress’ towards recovery alongside our ‘economic progress’.

This report summarises our Economic Recovery Index results from April 2009 to October 2017.

The most recent fieldwork was conducted during 18th to 21st

October 2017 inclusive.

See how bad it was eight years ago:https://www.slideshare.net/amarach/the-economic-recovery-index-october-results-2009

The Economic Recovery Index

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The ERI – Onwards and Upwards and……………

Source: Amárach Research, October 2017

Using the answers to the question on ‘stages of recovery’ we have created the Economic Recovery Index, which ranges from 0 to 100 (0 = deep recession; 100 = back to peak).

The Recovery Index and the Irish people’s views on the current and future state of the economy have improved considerably since its lowest point in November 2010,

However; over the previous 12 months, consumer confidence in the economy has flatlined – this somewhat jars with the macroeconomic performance over the same time period, with GDP +5.8% and numbers in work increasing by +2.4%. It seems economic growth, does not feed into consumers confidence about the economy.

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Ap

r-0

9

Jul-

09

Oct

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Jan

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Ap

r-1

0

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10

Oct

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Jan

-11

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r-1

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2

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Oct

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Jan

-13

Ap

r-1

3

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13

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-13

Jan

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Ap

r-1

4

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Oct

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Jan

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Ap

r-1

5

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15

Oct

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Jan

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Ap

r-1

6

Jul-

16

Oct

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Jan

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Ap

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7

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Oct

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Economic Recovery IndexApril 2009 – October 2017

38.040.042.044.046.0

Oct

-16

No

v-1

6

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

ERI Oct 2016 – Oct 2017

44

44.5

38.6

41.2

42.2

39.2

37.6

44.9

43.8

39.6

41.5

Male Female 16-24 25-34 35-44 45-54 55+ ABC1 C2DE

ERI - October 2017 x Demographics One of the most interesting (and unfortunate) aspects of the economic downturn, is the vastly differing experiences across demographic groups. Whereas some of the nation had to “tightened their belts”, others had to sell their belts (and their shoes!!) to keep their heads above water, while another cohort were able to buy a new bag to match the belt.

Owing to this, it is remarkable to see how these different socioeconomic groups are feeling about state of the economy today…

Those aged 35-54 are feeling much less optimistic compared to the total populations and it this group, more than any, that may still be feeling the effects of the property bubble bursting as on average, negative equity borrowers are 38 years old (Central Bank 2016) with average first-time buyer in Ireland in 2006 being approximately 29 years old (Daft).

The ERI – Housing Hangover…….10 Years Later

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The most striking disparity in terms of economic optimism this month is between male and females, with females 14% less optimistic about current and future state of the economy compeered to me – perhaps it is no coincidence that the average gender pay gap in Ireland is approximately 14% (IBEC) too, meaning the women of Ireland will hypothetically be working for free until the end of year. That is no cause for optimism – for either gender.

The ERI – A Glass Ceiling on Optimism and Earnings

44.5

41.5

38.6

Male Total Population Female

ERI - October 2017 Male vs. Female

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The ERI – Summary Table

Which one statement ‘best describes the economic situation in Ireland right now’?% choosing each statement:

%

The economic

situation in Ireland

is getting worse

The economic

situation is bad

but has stabilized

The economic

situation is bad

but showing a few

signs of

improvement

The economic

situation is getting

better and

showing clear

signs of

improvement

The economic

situation is good

and almost fully

recovered

Economic

Recovery

Index

Oct 09 47 30 22 1 0 19.6

Oct 10 56 23 18 2 1 16.3

Oct 11 42 31 25 2 0 22.0

Oct 12 48 28 21 3 0 19.8

Oct 13 32 32 32 4 0 27.4

Oct 14 18 28 38 14 2 38.3

Oct 15 11 29 35 22 3 43.9

Oct 16 14 30 33 21 2 42.5

Sept 17 16 28 28 22 3 41.2

Oct 17 16 30 29 21 4 41.5

The Recovery Index is lower in comparison to the same point in the previous three years, but with a slight pick up from last month – with the prevailing feeling amongst the nation is again one of stabilisation with a few signs of improvement.

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Consumer Impact

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We started calling our Index the ‘Recovery Index’ back in April 2009.

Over these past eight years we have tracked the highs and lows (and very lows) in terms of the mood of the nation and the impact on consumer spending, borrowing and saving intentions.

Irish consumers are feeling must less relaxed about spending money this month, perhaps due to Christmas looming and all its associated costs and optimism falling back slightly too.

Consumer Sentiment

% Agree

Ireland will be through the worst of the

recession in 12 months time

I feel I am financially

comfortable enough to make

it through the recession

I am optimistic in spite of the

current economic situation

Right now it seems like the

recession is affecting other people more

than it is affecting me

I am more relaxed about

spending money than I was a few

months ago

I am saving a lot more than

before because of the recession

My main financial priority is to pay off my debts as quickly

as possible

I would be happy to

borrow money from a bank if I

need to

NEW I always buy the lowest price products

or services

NEW I always buy Irish when I

can

Oct 09 48 46 55 56 16 32 61 33

Oct 10 26 41 44 52 15 25 59 27

Oct 11 26 38 49 45 14 22 54 23

Oct 12 26 38 48 44 16 25 56 25

Oct 13 30 36 44 43 18 24 57 24 58 51

Oct 14 41 43 51 40 23 25 57 25 56 51

Oct 15 42 46 54 45 33 27 51 28 50 49

Oct 16 35 44 55 41 32 29 55 32 54 52

Sept 17 39 46 58 41 37 32 63 39 54 60

Oct 17 35 48 51 41 31 32 56 36 53 57

99

Consumer Sentiment – Who Is Buying Irish?

59%

69%

60%58%

64%

57%

Female 55+ MUNSTER ABC1F50+ 90k+

54%

60%

71%

57%

51%57%

Tesco Dunnes Supervalu Aldi Lidl

SuperValu’s approach to promoting Irish produce obviously has traction, with shoppers there significantly more likely to always buy Irish when they can – Irish loyalists are also considerably more likely to be aged 55+ and with a household income of €90k per annum.

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Mood of the Nation

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The Mood of the Nation – Not Worrying, Not Happier…

Did you experience any of these feelings a lot of the day yesterday?% saying Yes: April 2009 to October 2017

When we started measuring and reporting theEconomic Recovery Index we wanted it to be more than just another ‘confidence index’.

We therefore set out to measure the full spectrum of emotions experienced by Irish consumers – positive as well as negative – in order to provide a unique insight into the real ‘mood’ of the nation.

This month has seen a minimal increase in happiness, but more positively, people were feeling less stress and worry October.

However; the downward trend of feeling happiness and/ or enjoyment on a daily basis continues.

On a more positive note overall, as a nation we are feeling fewer negative feelings on a daily basis, with stress, worry, sadness, pain, anxiety, anger, boredom and loneliness all trending downwards (see next slide).

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Enjoyment Happiness Stress Worry

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The Mood of the Nation – Looking back on anger

Did you experience any of these feelings a lot of the day yesterday?% saying Yes: April 2009 to October 2017 (Boredom and loneliness added in Jan and Dec 14)

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Anxiety Sadness Pain Anger

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Boredom Loneliness

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Amárach Outlook

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With the Christmas period fast approaching, it will be interesting to see how festivities will affect the feelings people feel on a daily basis. Do more parties and presents make us feel happier, or does it increase our levels of stress? And, will our perceptions about the economy change as we will no doubt be spending more.

The Economic Recovery Index, for the next 2 months will shed some light on these questions.

Outlook – Christmas on the Horizon…

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We survey 1,000 adults every month to create the Economic Recovery Index.

We also track dozens of data series relating to customer experience, spending levels, and switching intentions also as part of the same survey

You can view the full list (as well as a free dashboard with our latest data and forecasts) here:

Try out the free version for a one week trial period.

http://getPlanR.com/

Get PlanR and get Planning

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e. info@amarach.comt. 01 410 5200

w. www.amarach.comb. www.amarach.com/blog

Tw. twitter.com/AmarachResearchs. slideshare.net/amarach/