Amárach Economic Recovery Index April 2016 Special Edition

1 Economic Recovery Index

Economic Recovery Index An Amárach Research Briefing

Special Edition: April 2016


Are We There Yet?

It’s seven years since we started tracking

the Economic Recovery Index and so it

seems like a good time to look at our

progress so far.

This month we take a more detailed look at

what has changed and not changed in the

mood and intentions of Irish consumers over

that period, revisiting some questions we

posed several years ago and have updated

for the first time since 2009 and 2011.

Our overall ERI measure has continued to

decline from its peak at the start of the year

– and as you’ll see, the recovery, like the

recession, is not evenly distributed.


The Emotional Recovery

We have been reporting our monthly

Economic Recovery Index since April 2009.

We set out over six 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 2016.

The most recent fieldwork was conducted

during 19th to 25th April 2016 inclusive.

See how bad it was seven years ago: http://www.slideshare.net/amarach/the-economic-recovery-index-july-results-2009

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).

The ERI has continued to fall back – returning to levels seen last summer:

The Economic Recovery Index

Source: Amárach Research, April 2016

0

5

10

15

20

25

30

35

40

45

50

Ap

r '0

9

July

Sep

t

No

v

Jan

'10

Mar

May Ju

ly

Sep

t

No

v

Jan

'11

Mar

May Ju

ly

Sep

t

No

v

Jan

'12

Mar

May Ju

ly

Sep

t

No

v

Jan

'13

Mar

May

July

Sep

t

No

v

Jan

'14

Mar

May

July

Sep

t

No

v

Jan

'15

Mar

May

July

Sep

t

No

v

Jan

'16

Mar

The ERI is back to its mid-2015 level


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

Apr-14 23 32 35 9 1 33.2

Apr-15 14 30 37 17 2 40.2

Mar-16 13 30 35 20 2 42.2

Apr-16 16 30 32 20 2 41.8

Nevertheless the ERI remains above the 40 level

Consumer Impact


Recession, Resilience & Recovery

We started calling our Index the ‘Recovery

Index’ back in April 2009 as we wanted to

emphasise the positive and didn’t think the

recession would last so long!

Over these past seven years we have tracked

the highs and lows (and some very lows) in

terms of the mood of the nation and the

impact on consumer spending, borrowing and

saving intentions.

We’ve also seen remarkable resilience on the

part of the Irish people when it comes to

‘getting on’ with their lives, despite macro-

economic uncertainties.

In this section we look at how far we have

come, and how far we still have to go.


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

Apr-14 35 40 49 43

Apr-15 46 45 57 44

Mar-16 37 44 52 44

Apr-16 32 42 47 42

Feeling ‘financially comfortable’ remains flat


Consumer Sentiment Summary Table II

% agree strongly/slightly with selected statements:

%

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

Apr-14 24 24 56 26

Apr-15 30 26 51 28

Mar-16 28 25 55 26

Apr-16 27 23 51 24

Spending sentiment has weakened in recent months


R²=0.90181

0

5

10

15

20

25

30

35

40

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0

%Agree:M

oreRelaxedAboutSpendingMoney

EconomicRecoveryIndex

EconomicSentimentDrivesConsumerSpendingSentiment

Consumer Sentiment & ERI: April 2009-April 2016

The ERI and consumer spending sentiment are highly correlated


Recovery Priced In?

Trend for price focus and switching intentions appears downwards in past 3 years

40

45

50

55

60

65

70

75

80

Recessionistas%consumersagree:buylowestprice&readytoswitch

Ialwaysbuythelowestpriceproductsorservices Iamalwaysonthelookoutforopportunitiestoswitchtocheapersuppliers


Financial Resilience: 1

Despite the macro improvement, at a micro level consumers are still worried

35%

57%

66%

36%

56%

47%

I lose sleep worrying abouthow to cope with my

financial commitments

When shopping I budget forevery cent

I am afraid to make plansfor the future given the

uncertainty

Still Pressured % agreeing with each statement: 2009 vs 2016

2009 2016



The ‘shock’ of the recession may be over, but the impact lingers in consumer mindset

81%

71% 70% 61% 58%

49%

I am consciously trying tobuy fewer things nowadays

I am striving for a simplerlife

I am not making anysignificant financial

decisions until thingsimprove in the economy

Taking Control % agreeing with each statement: 2009 vs 2016

2009 2016



There is evidence of some improved resilience – but most still vulnerable

24%

12%

8%

31%

17%

13%

€50 reduction €100 reduction €150 reduction

Resilient Consumers % able to ‘cope easily’ with varying reductions in

monthly after tax income: 2011 vs 2016

2011 2016


Not So Negative Equity

There has been an reduction in perceived negative equity since 2011

22% 19%

50%

9% 15%

18%

53%

14%

Value of home lessthan mortgage

Value of home sameas mortgage

Value of homegreater than

mortgage

Don't know

Negative vs Positive Equity % of home owners with mortgages in negative or positive

equity: 2011 vs 2016

2011 2016

Mood of the Nation


The Real Mood of the Nation

When we started measuring and reporting the

Economic 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 ones

– in order to provide a unique insight into the

real ‘mood’ of the nation.

We have seen some interesting trends as a

result, including a widening gap between

positive and negative emotions – though both

are trending downwards over time.

The following charts review the past seven

years and some key trends.


Emotional Economics: 1

An improving economic outlook reduces stress & worry, but no significant impact on

happiness or enjoyment

-0.16 -0.17 -0.21

-0.48 -0.49

-0.67

-0.72

Happiness Sadness Enjoyment Anger Anxiety Worry Stress

ERI Correlation with Emotions April 2009-April 2016


Emotional Economics: 2

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

20

25

30

35

40

45

50

55

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

Jun-11

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

Jun-12

Aug-12

Oct-12

Dec-12

Feb-13

Apr-13

Jun-13

Aug-13

Oct-13

Dec-13

Feb-14

Apr-14

Jun-14

Aug-14

Oct-14

Dec-14

Feb-15

Apr-15

Jun-15

Aug-15

Oct-15

Dec-15

Feb-16

EmotionalLowsTrendinERIvs%FeelingStressand%FeelingWorry

%Stress %Worry EconomicRecoveryIndex(RHS)


The Mood of the Nation – I

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

% saying Yes: April 2009 to April 2016


20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

Ap

r '0

9

May

Ju

n

Ju

l

Au

g

Se

pt

Oct

Nov

Dec

Ja

n'1

0

Feb

Mar

Ap

r

May

Ju

ne

Ju

ly

Au

g

Se

pt

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Nov

Dec

Ja

n'1

1

Feb

Mar

Ap

r

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Ju

ne

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Au

g

Se

pt

Oct

Nov

Dec

Ja

n'1

2

Feb

Mar

Ap

r

May

Ju

ne

Ju

ly

Au

g

Se

pt

Oct

Nov

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Ja

n'1

3

Feb

Mar

Ap

r

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Ju

ne

Ju

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Au

g

Se

pt

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Dec

Ja

n'1

4

Feb

Mar

Ap

r

May

Ju

ne

Ju

ly

Au

g

Se

pt

Oct

Nov

Dec

Ja

n'1

5

Feb

Mar

Ap

r

May

Ju

ne

Ju

ly

Au

g

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pt

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Nov

Dec

Ja

n'1

6

Feb

Mar

Ap

r

Enjoyment Happiness Stress Worry


The Mood of the Nation – II


% saying Yes: April 2009 to April 2016


0%

5%

10%

15%

20%

25%

30%

35%

40%

Ap

r '0

9

May

Ju

n

Ju

l

Au

g

Se

pt

Oct

Nov

Dec

Ja

n'1

0

Feb

Mar

Ap

r

May

Ju

ne

Ju

ly

Au

g

Se

pt

Oct

Nov

Dec

Ja

n'1

1

Feb

Mar

Ap

r

May

Ju

ne

Ju

ly

Au

g

Se

pt

Oct

Nov

Dec

Ja

n'1

2

Feb

Mar

Ap

r

May

Ju

ne

Ju

ly

Au

g

Se

pt

Oct

Nov

Dec

Ja

n'1

3

Feb

Mar

Ap

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May

Ju

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g

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pt

Oct

Nov

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Ja

n'1

4

Feb

Mar

Ap

r

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Ju

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Au

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pt

Oct

Nov

Dec

Ja

n'1

5

Feb

Mar

Ap

r

May

Ju

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Ju

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Au

g

Se

pt

Oct

Nov

Dec

Ja

n'1

6

Feb

Mar

Ap

r

Anxiety Sadness Pain Anger


The Mood of the Nation – III


% saying Yes: April 2016


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

F50+

C2DE

F50-

Enjoyment 50% 45% 54% 46% 38% 48% 51% 64% 47% 54% 47%

Happiness 49% 46% 52% 45% 45% 48% 45% 58% 45% 51% 48%

Stress 35% 29% 41% 53% 36% 35% 33% 24% 36% 32% 38%

Worry 33% 28% 37% 47% 34% 30% 39% 21% 36% 30% 35%

Anxiety 28% 25% 32% 47% 29% 25% 29% 18% 31% 29% 28%

Boredom 22% 20% 24% 44% 22% 20% 20% 10% 20% 24% 20%

Physical Pain 25% 20% 29% 26% 21% 22% 30% 25% 24% 20% 28%

Sadness 22% 17% 26% 30% 24% 16% 26% 17% 23% 20% 23%

Anger 17% 16% 18% 25% 23% 14% 18% 9% 16% 16% 18%

Loneliness 16% 12% 20% 28% 19% 11% 18% 8% 16% 16% 16%

Fear 10% 9% 11% 16% 11% 9% 10% 6% 9% 9% 10%

Amárach Outlook


2016 Beginning

The first third of 2016 has seen a turning

point in our Economic Recovery Index.

We’ll keep tracking its progress into 2016 –

and we’ll keep you posted about Ireland’s

consumer needs.

We hope you find this edition of the

Economic Recovery Index helpful and

please do get in contact if you want to

discuss how it can be applied to your brand

planning requirements in 2016 and beyond.

For more on the ERI (including 7 years worth of data) see: http://www.amarach.com/resources/economic-recovery-index.htm

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Amárach Economic Recovery Index April 2016 Special Edition

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Transcript of Amárach Economic Recovery Index April 2016 Special Edition