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A survey of consumer intentions in relation to spending, saving and borrowing in light of perceived trends in the economy.
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The Economic Recovery IndexAn Amárach Research Briefing
October Index Results
© Amárach Research 2009
May 2011 Results
The AIB Amárach Recovery Indicator
2
The Emotional Recovery
• We have been reporting our monthly
Recovery Indicator since April 2009.
• We set out two years ago to assess the
psychological impact of the recession and to
chart our ‘emotional progress’ towards recovery
alongside our ‘economic progress’.
• Our tracking research has shown the
remarkable emotional strength of the Irish
people, who have consistently reported
‘happiness’ and ‘enjoyment’ as their two most
frequently experienced emotions.
• But we are still in recession – and the path to
recovery still lies some way ahead.
• We will help you along that path.
3
Timing Recovery
• 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
Recovery Indicator to help us track the
economic cycle more closely.
• This report summarises the AIB-Amárach
Recovery Indicator results from April 2009
(when it began) to May 2011.
• The fieldwork was conducted during the period
9th-14th May 2011 inclusive.
Business Cycle Peaks & Troughs
4
A Matter of Measurement• Every month we survey a representative sample of 1,000 adults – split 850 online and
150 face-to-face to ensure coverage of the total population – 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
5
A Matter of Measurement
Apr‘11 51% May‘11 40%
Apr’11 27% May’11 33%
Apr’11 19% May’11 24%
Apr’11 2% May’11 2%
Apr’11 1% May’11 1%
• May 2011 saw a large improvement in the percentage seeing signs of improvement:
6
• Using the answers to the survey we have created the Recovery Indicator, which ranges from 0 to 100
(0 = worsening recession; 100 = back to peak).
• In May 2011, the Indicator improved strongly, returning to the same level a year previously.
17.8 18.3
27.1
22.7 23.523.8 23.8
25.3 2624
19.2
16.3
7.3
12
17.3 18 19.218.2
22.1
0
5
10
15
20
25
30
Nov Dec Jan Feb Mar Apr '10
May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr '11
May
AIB-Amárach Recovery Indicator
7
34%41%44% 42%43%46%48%
41%43%52%
41% 42%43% 42%42%
42%39%
31%26%18%23%26%24%25%24%28%
Ap
r '0
9
May
Ju
n
Ju
ly
Au
g
Se
pt
Oct
No
v
De
c
Jan
Fe
b
Mar
Ap
r '1
0
May
Ju
ne
Ju
ly
Au
g
Se
pt
Oct
No
v
De
c
Jan
Fe
b
Mar
Ap
r '1
1
May
Ireland will be through the worst of the recession in 12 months time: % agree strongly/slightly
57% 59%65%
58% 60% 62% 55%
51%51%
61%
55%54%52% 53%
54%55%
50% 46% 44%33%41%
48%44%48%47%53%
Ap
r '0
9
May
Ju
n
Ju
ly
Au
g
Se
pt
Oct
No
v
De
c
Jan
Fe
b
Mar
Ap
r '1
0
May
Ju
ne
Ju
ly
Au
g
Se
pt
Oct
No
v
De
c
Jan
Fe
b
Mar
Ap
r '1
1
May
I am optimistic in spite of the current economic situation: % agree strongly/slightly
Recovery Outlook 1
8
48%48%51% 47%48%48%46%45%45%50%
47% 43%47%45%45%
47%46%
41%41%32%34%39%37%36%39%40%
Ap
r '0
9
May
Ju
n
Ju
ly
Au
g
Se
pt
Oct
No
v
De
c
Jan
Fe
b
Mar
Ap
r '1
0
May
Ju
ne
Ju
ly
Au
g
Se
pt
Oct
No
v
De
c
Jan
Fe
b
Mar
Ap
r '1
1
May
I feel I am financially comfortable enough to make it through the recession: % agree strongly/slightly
Recovery Outlook 2
59%
62% 61%60%61%60% 56%
52%
56%55%53% 55%
53%51% 50%
55%
54%
53%
52% 45%45%49%45%47%48%50%
Ap
r '0
9
May
Ju
n
Ju
ly
Au
g
Se
pt
Oct
No
v
De
c
Jan
Fe
b
Mar
Ap
r'10
May
Ju
ne
Ju
ly
Au
g
Se
pt
Oct
No
v
De
c
Jan
Fe
b
Mar
Ap
r '1
1
May
Right now it seems like the recession is affecting other people more than it is affecting me: % agree strongly/slightly
9
Percent of adults who agree with each statement: April 2009, 2010, 2011 & May 2011
16% 21% 14% 17%
April '09
April '10
April '11
May '11
I am more relaxed about spendingmoney than I was a few months ago
53%64% 60% 62%
Apr '09
Apr '10
Apr '11
May '11
Now is a good time to buy a house for those
who want to
36%28% 27% 26%
Apr '09
Apr '10
Apr '11
May '11
I am saving a lot more than before because of
the recession
31% 24% 26%
Apr '10
Apr '11
May '11
I would be happy to borrow from a bank if I
need to 59% 58% 61%
Apr '10
Apr '11
May '11
Paying off debts is my main financial priority
Impact on:
•Spending
•Saving
•Debt
•Borrowing
Financial Sentiment Indicators from the ARI Survey
NB: debt & borrowing questions not asked in 2009
10
The Mood of the Nation 1
Did you experience any of these feelings a lot of the day yesterday?
April 2009 to May 2011
0%
10%
20%
30%
40%
50%
60%
70%
Apr
'09
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan
Feb
Mar
Apr
'10
May
June
July
Aug
Sept
Oct
Nov
Dec
Jan
Feb
Mar
Apr
'11
May
Enjoyment Happiness Stress Worry
11
The Mood of the Nation 2
Did you experience any of these feelings a lot of the day yesterday?
April 2009 to May 2011
0%
5%
10%
15%
20%
25%
30%
35%
40%
Ap
r '0
9
Ma
y
Jun
Jul
Aug
Se
pt
Oct
No
v
De
c
Ja
n
Fe
b
Ma
r
Ap
r '1
0
Ma
y
June
July
Aug
Se
pt
Oct
No
v
De
c
Ja
n
Fe
b
Ma
r
Ap
r '1
1
Ma
y
Anxiety Sadness Pain Anger
12
Taking Stock
• The mood of the nation seems back to where it
was a year ago: not exactly thriving but not in the
doldrums either.
• It is too early to tell whether this better mood will
translate into increased consumer spending – it
did last year... but that didn’t end so well and so
people will be cautious.
• Nevertheless, the continued resilience of the Irish
people should give us hope: once consumers
really do feel the worst is over then the potential
for a ‘bounce’ in spending is very real...
eventually.
• But we’re not there yet: stay tuned to future
issues of the AIB-Amárach Recovery Indicator to
find out when we do get there...
13
Amárach Contact Details
Gerard O’Neill
Chairman
Amárach Research
11 Kingswood Business Centre
Citywest Business Campus
Dublin 24
telephone: (01) 410 5200
email: [email protected]
website: www.amarach.com
blog: www.amarach.com/blog
twitter: www.twitter.com/amarachresearch
