aib amárach recovery indicator may 2010
DESCRIPTION
TRANSCRIPT
The Economic Recovery IndexAn Amárach Research Briefing
October Index Results
© Amárach Research 2009
May 2010 Results
The AIB Amárach Recovery Indicator
2
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 Recovery
Indicator results for April 2009 (when it
began) to May 2010
• The fieldwork was conducted on 10th to
18th May 2010
Business Cycle Peaks & Troughs
3
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
4
A Matter of Measurement
April’09 77% May’10 36%
April’09 14% May’10 34%
April’09 8% May’10 27%
April’09 1% May’10 2%
April’09 0% May’10 *
• The general sense in May’10 remains very consistent with March and April ‘10. Similarly to
April ‘10; when it comes to the economy, there is still a divide between it is ‘bad but stable or
improving’ and it is ‘bad and getting worse’.
AIB-Amárach Recovery Indicator• 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)
• The Recovery Indicator experienced its strongest monthly surge in January 2010,
more gradual growths are evident over the February to April periods whilst May
remains steady.
8.3
16.317.8
1517
18.419.6
17.8 18.3
27.1
22.723.5 23.823.8
0
5
10
15
20
25
30
Apr '09 May Jun July Aug Sept Oct Nov Dec Jan '10 Feb Mar Apr '10 May
6
Recovery Outlook 1
34% 41% 44% 42% 43% 46% 48% 41% 43%52%
41% 42% 43% 42%
Apr '09 May Jun July Aug Sept Oct Nov Dec Jan '10 Feb Mar Apr 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%
Apr '09 May Jun July Aug Sept Oct Nov Dec Jan '10 Feb Mar Apr May
I am optimistic in spite of the current economic situation: % agree strongly/slightly
7
Recovery Outlook 2
48% 48% 51% 47% 48% 48% 46%45% 45% 50%
47% 43% 47% 45%
Apr '09 May Jun July Aug Sept Oct Nov Dec Jan '10 Feb Mar Apr May
I feel I am financially comfortable enough to make it through the recession: % agree strongly/slightly
59% 62% 61% 60% 61% 60% 56%52%
56% 55% 53% 55%
53%51%
Apr '09 May Jun July Aug Sept Oct Nov Dec Jan '10 Feb Mar Apr May
Right now it seems like the recession is affecting other people more than it is affecting me: % agree strongly/slightly
8
Financial Sentiment Indicators from the ARI SurveyPercent of adults who agree with each statement: May 2009 and May 2010 (unless otherwise stated)
15% 19%
May '09 May '10
I am more relaxed about spendingmoney than I was a few months ago
62% 64%
Oct '09 May '10
Now is a good time to buy a house* for those
who want to
37%26%
May '09 May '10
I am saving a lot more than before because of
the recession
33% 28%
Oct '09 May '10
I would be happy to borrow from a bank if I
need to 61% 61%
Oct'09 May '10
Paying off debts is my main financial priority
Impact on:
•Spending
•Saving
•Debt
•Borrowing
* „a new house‟ in 2009
##
#
# Question first asked in October 2009
9
What would you do if you received a surprised gift of
€10,000 tax free? Average allocation in euro
10
The Mood of the Nation 1
Did you experience any of these feelings a lot of the day yesterday?
April 2009 to May 2010
0%
10%
20%
30%
40%
50%
60%
70%
Apr '09
May Jun Jul Aug Sept Oct Nov Dec Jan '10
Feb Mar Apr '10
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 2010
0%
5%
10%
15%
20%
25%
30%
35%
Apr '09
May Jun Jul Aug Sept Oct Nov Dec Jan '10
Feb Mar Apr '10
May
Anxiety Sadness Pain Anger
12
Changes in Perception versus Behaviour
• The ARI shows dramatic differences in perception of the recession‟s impact now compared
to 12 months ago. Quite a gloomy picture was facing us 12 months ago whilst the ARI now
paints a slightly more positive view (16.3 versus 23.8)
• Other indicators show signs of greater confidence:
• We appear to be more relaxed about spending (15% a year ago and 19% now)
• And “saving a lot more” has declined (37% May „09, now at 26%).
• .... some behavioural changes have not improved as positively as our perceptual changes for
example:
• We are still concerned with paying off debt (Oct „09 compared to now both remain at
61%).
• And we are less happy to borrow from a bank if we need to (33% Oct „09 compared to
28% May „10).
• Interestingly, if presented with a „surprise prize‟ of €10,000, the greatest allocation goes to
saving, then paying off debts and finally spending. 16-24 year olds who can afford to allocate
more to savings, as they hold less debt that other age cohorts.
• The short term outlook is for continuing consumer caution as we enter the summer months.
13
Amárach Contact Details
Gerard O‟Neill - Chairman
Amárach Research
11 Kingswood Business Centre
Citywest Business Campus
Dublin 24
T. (01) 410 5200
W. www.amarach.com
B. amarachresearch.blogspot.com
AIB Contact Details
Ronan Sheridan
Group Press Officer
AIB
Bankcentre
Ballsbridge
Dublin 4
T. (01) 641 4651
M. 086 388 0898