amárach economic recovery index april 2014

1 Economic Recovery Index

Economic Recovery Index An Amárach Research Briefing April 2014: special anniversary edition

© Amárach Research


Happy Birthday

We have been tracking the mood of the

nation with our Economic Recovery Index

for five years this month.

A lot has changed –on the economic and on

the consumer front – but not everything.

We have expanded this month’s commentary

to reflect on the past five years and to

analyse the economic situation of Irish

consumers in more detail in order to identify

those groups that are leading the recovery –

or lagging it.

Thank you to all our regular readers for your

feedback on the ERI over these past few

years, you have inspired us with lots of ideas

for improvement and expansion in the

months ahead.


The Emotional Recovery

We have been reporting our monthly

Economic Recovery Index since April 2009.

We set out five 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

April 2014.

The most recent fieldwork was conducted

during 14th-21st April 2014 inclusive.

The full data series is on our website –

details at the end of this report.

Economic Recovery Index


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).

Our Index eased back to 33.2 in April 2014, falling back from last month’s record level:

The Economic Recovery Index

Source: Amárach Research, April 2014

0

5

10

15

20

25

30

35

40

Ap

r '0

9

Jun

July

Au

g

Sep

t

Oct

No

v

Dec

Jan

'10

Feb

Mar

Ap

r

May

Jun

e

July

Au

g

Sep

t

Oct

No

v

Dec

Jan

'11

Feb

Mar

Ap

r

May

Jun

e

July

Au

g

Sep

t

Oct

No

v

Dec

Jan

'12

Feb

Mar

Ap

r

May

Jun

e

July

Au

g

Sep

t

Oct

No

v

Dec

Jan

'13

Feb

Mar

Ap

r

May

Jun

e

July

Au

g

Sep

t

Oct

No

v

Dec

Jan

'14

Feb

Mar

Ap

r

despite this month’s fall back, the ERI remains at historically high levels


A Matter of Measurement

Mar ’14: 19% Apr ’14: 23%

Mar ’14: 34% Apr ’14: 32%

Mar ’14: 36% Apr ’14: 35%

Mar ’14: 10% Apr ’14: 9%

Mar ’14: 1% Apr ’14: 1%

Every month we survey a representative, online sample of 1,000 adults and ask them to tell us

which one statement ‘best describes the economic situation in Ireland right now’ (listed below)

The percentage thinking ‘things are getting worse’ is the lowest since we began:


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

Apr-09 77 14 8 1 0 8.3

Apr-10 38 34 25 2 1 23.8

Apr-11 51 27 19 2 1 18.2

Apr-12 49 27 21 3 0 19.4

Apr-13 46 29 22 3 0 20.3

Mar-14 19 34 36 10 1 34.7

Apr-14 23 32 35 9 1 33.2

the false dawn of recovery in 2010 has been replaced by a more viable one in 2014


Uneven Recovery

Which one statement ‘best describes the economic situation in Ireland right now’?

(by sex, age, class, Dublin)


April 2014 TOTAL Male Female 15-24 25-34 35-44 45-54 55+ Dublin ABC1

F50+

C2DE

F50-

1000 494 507 169 223 187 156 265 279 477 523

The economic situation

in Ireland is getting

worse

23% 24% 21% 23% 19% 24% 21% 26% 20% 19% 26%


is bad but has stabilized 32% 35% 30% 30% 39% 31% 35% 27% 32% 33% 31%


is bad but showing a

few signs of

improvement

36% 32% 39% 38% 31% 36% 39% 37% 36% 35% 37%


is getting better and

showing clear signs of

improvement

9% 9% 9% 9% 10% 8% 5% 11% 12% 12% 6%


is good and almost fully

recovered from the

recession

1% 0% 1% 1% 2% 1% 0% 0% 0% 1% 0%

ERI Score 33.2 32.1 34.2 31.2 34.7 32.9 32.7 33.7 34.8 35.8 30.8

Consumer Impact


Consumer Sentiment Summary Table I

% agree strongly/slightly with selected statements:

%

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

Apr-09 34 48 57 59

Apr-10 43 47 52 53

Apr-11 24 39 47 48

Apr-12 31 42 51 50

Apr-13 25 35 40 44

Mar-14 37 40 49 45

Apr-14 35 40 49 43

despite signs of recovery, consumers feel more impacted by recession than before


Consumer Sentiment Summary Table II


%

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

Apr-09 15

Apr-10 21 28 59 31

Apr-11 14 27 58 24

Apr-12 20 30 59 28

Apr-13 15 23 57 21

Mar-14 23 24 58 26

Apr-14 24 24 56 26

indicators of consumer spending & borrowing intentions are stable but not rising


Consumer Sentiment Summary Table III


%

I always buy

the lowest

price products

or services

I am always on

the lookout for

opportunities to

switch to

cheaper

suppliers

I have more

choice than

before when it

comes to

products and

services

I always buy

Irish when I

can

Apr-13 57 71 52 52

May-13 58 69 54 54

Jun-13 55 70 55 51

Jul-13 56 70 52 53

Aug-13 57 70 53 53

Sep-13 59 72 53 54

Oct-13 58 69 52 51

Nov-13 56 69 55 51

Dec-13 54 68 54 53

Jan-14 59 74 56 54

Feb-14 56 70 57 52

Mar-14 57 68 56 48

Apr-14 56 69 54 50


Insulated

% of Irish adults who agree/disagree with the statement (by sex, age, class, Dublin):

“Right now the recession is affecting other people more than me”



F50+

C2DE

F50-

Weighted Sample 1000 494 507 169 223 187 156 265 279 477 523

Strongly Agree 16% 14% 19% 20% 19% 13% 12% 16% 17% 21% 12%

Slightly Agree 26% 26% 26% 25% 29% 25% 23% 28% 28% 31% 23%

Neither/Nor 19% 21% 18% 19% 21% 17% 20% 19% 19% 16% 22%

Slightly Disagree 19% 20% 18% 17% 16% 21% 24% 18% 19% 18% 20%

Strongly Disagree 17% 16% 17% 12% 12% 21% 19% 19% 15% 13% 20%


Price Sensitive


“I always buy the lowest price product or service”



F50+

C2DE

F50-

Weighted Sample 1000 494 507 169 223 187 156 265 279 477 523

Strongly Agree 26% 23% 30% 34% 24% 29% 24% 23% 28% 22% 30%

Slightly Agree 30% 31% 29% 24% 33% 36% 32% 25% 31% 33% 27%

Neither/Nor 20% 24% 15% 17% 22% 13% 22% 23% 20% 20% 19%




Borrowing Intentions


“I would be happy to borrow money from a bank if I needed to”



F50+

C2DE

F50-

Weighted Sample 1000 494 507 169 223 187 156 265 279 477 523

Strongly Agree 8% 10% 6% 7% 12% 9% 3% 7% 13% 8% 8%

Slightly Agree 18% 18% 18% 21% 21% 19% 16% 15% 20% 23% 14%

Neither/Nor 13% 15% 12% 16% 20% 13% 15% 6% 11% 13% 14%



Marketing Economics


Discretionary Income

Typically, how much money do you have left at the end of the month, before your

next wage or salary payment?: Base: all adults


F50+

C2DE

F50-

Average

left over €142 €165 €111 €116 €162 €136 €145 €124 €171 €179 €90

% saying zero 31% 29% 32% 21% 23% 33% 40% 35% 30% 27% 36%

25-34s are among the most financially resilient in terms of income


Income Pressures

Would you say you have: Base: all adults


F50+

C2DE

F50-

More money left

over than a few

months ago

11% 13% 9% 16% 15% 10% 7% 9% 15% 13% 8%

The same money

left over than a

few months ago

38% 39% 36% 39% 43% 37% 37% 31% 35% 40% 34%

Less money left

over than a few

months ago

51% 47% 55% 45% 43% 53% 56% 60% 50% 46% 57%

older age groups are experiencing the most pressure on incomes


Income Sensitivity

Please indicate how easily you would cope with a fall in monthly after tax income

in each of three scenarios: €50/€100/€150 monthly decrease - % cope easily: Base: all adults

April 2014 TOTAL

2012

TOTAL

2014 Male Female 15-24 25-34 35-44 45-54 55+

ABC1

F50+

C2DE

F50-

% Easily: €50 21% 24% 25% 23% 22% 34% 22% 18% 21% 31% 18%

% Easily: €100 11% 12% 14% 10% 12% 20% 12% 7% 9% 17% 7%

% Easily: €150 8% 9% 10% 7% 11% 15% 6% 6% 5% 12% 5%

consumers are slightly more resilient to income shocks than 2 years ago


Rainy Day Funds

Which of the following best describes the total value of funds that you currently

have in savings or investments (excluding any formal pension plans)? Base: all regular savers


F50+

C2DE

F50-

% save

regularly 48% 49% 48% 61% 58% 40% 39% 44% 51% 54% 43%

Average value

of savings &

investments

€000s

€25.5 €37.0 €13.0 €7.4 €10.6 €13.2 €39.5 €58.7 €32.4 €32.2 €17.7

older consumers are less likely to save regularly & are living off past savings


Positive Equity

Thinking about the value of your home today, do you think it is worth more than

you currently owe on your mortgage, about the same as you currently owe on

your mortgage, or less than you currently owe on your mortgage? Base: all responsible – solely or jointly – for paying mortgage on their home

April 2014 TOTAL

2012

TOTAL

2014 15-24 25-34 35-44 45-54 55+ Dublin

Rest

of

L’ster

ABC1

F50+

C2DE

F50-

Value of home is worth

more than you currently

owe on you mortgage

42% 47% 45% 37% 28% 55% 68% 57% 37% 49% 45%

Value of home is about

the same as you currently

owe on you mortgage

18% 14% 10% 29% 16% 12% 5% 10% 17% 13% 16%

Value of home is less than

you currently owe on you

mortgage

30% 27% 23% 26% 50% 24% 9% 23% 34% 28% 26%

Don’t know 10% 12% 22% 8% 6% 9% 19% 11% 11% 10% 13%

there has been a significant jump in positive equity over the past 2 years


Domestic Balance Sheet

How would you describe your situation in terms of your financial assets (e.g.:

house, car, savings, pensions) versus your financial liabilities (e.g.: mortgage,

loans, debts)? Would you say that... Base: all adults


F50+

C2DE

F50-

Your financial assets

exceed your financial

liabilities

31% 36% 26% 19% 21% 23% 30% 53% 30% 35% 27%

Your financial assets

and liabilities roughly

match each other

35% 34% 35% 38% 41% 31% 35% 28% 39% 32% 37%

Your financial liabilities

exceed your financial

assets

22% 23% 22% 14% 24% 36% 25% 15% 18% 21% 24%

Don't know 12% 7% 17% 30% 13% 9% 10% 4% 13% 12% 12%

The Irish claim a positive ‘balance sheet’, but don’t forget:

debt is a fact, wealth is an opinion

Mood of the Nation


The Mood of the Nation 1

Did you experience any of these feelings a lot of the day yesterday?

% saying Yes: April 2009 to April 2014


0%

10%

20%

30%

40%

50%

60%

70%

Ap

r '0

9M

ay

Jun

Jul

Au

gS

ept

Oct

Nov

Dec

Jan

'10

Fe

bM

ar

Ap

rM

ay

Jun

eJuly

Au

gS

ept

Oct

Nov

Dec

Jan

'11

Fe

bM

ar

Ap

rM

ay

Jun

eJuly

Au

gS

ept

Oct

Nov

Dec

Jan

'12

Fe

bM

ar

Ap

rM

ay

Jun

eJuly

Au

gS

ept

Oct

Nov

Dec

Jan

'13

Fe

bM

ar

Ap

rM

ay

Jun

eJuly

Au

gS

ept

Oct

Nov

Dec

Jan

'14

Fe

bM

ar

Ap

r

Enjoyment Happiness Stress Worry


The Mood of the Nation 2


% saying Yes: April 2009 to April 2014


0%

5%

10%

15%

20%

25%

30%

35%

40%

Ap

r '0

9

Ma

y

Jun

Jul

Au

g

Se

pt

Oct

Nov

Dec

Jan

'10

Fe

b

Ma

r

Ap

r

Ma

y

Jun

e

July

Au

g

Se

pt

Oct

Nov

Dec

Jan

'11

Fe

b

Ma

r

Ap

r

Ma

y

Jun

e

July

Au

g

Se

pt

Oct

Nov

Dec

Jan

'12

Fe

b

Ma

r

Ap

r

Ma

y

Jun

e

July

Au

g

Se

pt

Oct

Nov

Dec

Jan

'13

Fe

b

Ma

r

Ap

r

Ma

y

Jun

e

July

Au

g

Se

pt

Oct

Nov

Dec

Jan

'14

Fe

b

Ma

r

Ap

r

Anxiety Sadness Pain Anger


Changing Moods



F50+

C2DE

F50-

Weighted Sample 1000 494 507 169 223 187 156 265 279 477 523

Enjoyment 56% 60% 53% 60% 53% 48% 61% 61% 59% 59% 54%

Happiness 53% 50% 57% 65% 51% 46% 51% 54% 54% 57% 50%

Stress 40% 40% 40% 46% 43% 48% 41% 27% 39% 38% 42%

Worry 37% 37% 37% 36% 40% 39% 39% 33% 35% 34% 40%

Anxiety 30% 31% 28% 29% 37% 30% 30% 23% 25% 29% 30%

Boredom 23% 22% 24% 43% 27% 21% 16% 14% 17% 22% 25%

Physical Pain 25% 25% 24% 21% 21% 24% 29% 28% 24% 20% 29%

Sadness 19% 16% 21% 20% 21% 21% 17% 16% 18% 18% 20%

Anger 16% 20% 12% 19% 18% 20% 15% 10% 15% 14% 18%

Fear 10% 9% 10% 11% 14% 11% 10% 5% 9% 8% 11%


% saying Yes: April 2014

Amárach Outlook


Recovering Opportunity

Our work at Amárach regularly requires us to

help clients identify new growth opportunities

in the face of wider economic constraints.

From our latest findings and supplementary

analyses we can see a widening generation

gap in terms of the Irish consumer market:

> 25-35s have more discretionary income

and are saving more of it

> over 45s have more wealth but are

experiencing greater income pressure.

We hope this 5th anniversary edition of the

Economic Recovery Index has given you

some food for thought about the opportunities

that lie ahead over the remainder of 2014.

we ask better questions

so you get better answers

Image: http://yourawakenedself.com/tag/jacob-nordby/

Trends Report

Call us on 01 410 5200 if you want maximize

the prize in 2014:

e. [email protected]

w. www.amarach.com

b. www.amarach.com/blog

t. twitter.com/AmarachResearch

For more on the ERI see: http://www.amarach.com/resources/economic-recovery-index.htm