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Dublin Consumer Sentiment improved significantly in the first quarter of 2016 to reach its highest level in the thirteen years for which regional sentiment survey data are now available. In contrast, confidence among consumers in the rest of Ireland was largely unchanged from the previous quarter which marked the series highpoint for that index.
The stronger trend in sentiment in Dublin than elsewhere in early 2015 may reflect a greater resilience to increasing concerns about global and domestic economic risks. Consumers in the rest of Ireland may feel that the recovery outside the capital is not as well established and any set-back to economic conditions may be more damaging to their circumstances in what is still an unevenly felt upturn. These results also suggest that the sense of a two-speed recovery may remain a feature of the Irish economy for some time to come.
It should be emphasised that current readings still suggest the broad trend in consumer sentiment remains positive both in Dublin and in the rest of Ireland although somewhat uneven readings also hint at contrasting circumstances across households even in the same region. Views on household finances are becoming modestly more positive overall, both in the capital and elsewhere. Marginally more consumers say their financial circumstances improved in the past year than reported a deterioration and a notably more positive outlook is expected in the year ahead. In both instances, consumers in Dublin are somewhat more positive than their counterparts outside the capital.
Consumers in Dublin and elsewhere were a little less optimistic about the outlook for the Irish economy in the year ahead than they were three months ago, likely reflecting both global and local concerns. This downgrade was more pronounced outside the capital and this meant those consumers also downgraded their outlook for jobs while Dubliners were more confident about employment prospects in early 2016.