DUBLIN (Reuters) - Irish consumer sentiment rebounded in March, suggesting that better employment prospects are encouraging consumers to increase their spending even if they remain cautious about the general economic outlook, a survey showed on Thursday.
The improvement reverses a decline in February and continues a see-saw pattern of monthly changes, although a modestly positive trend is still intact.
The KBC Bank Ireland/ESRI consumer sentiment index increased to 108.1 in March from 105.2 in February. In January, the index hit 110.4, which was the highest level since February 2001.
"The pick-up in sentiment in March represents a continuation of a trend improvement in confidence as Irish consumers put more distance between themselves and the recent financial crisis," KBC chief economist Austin Hughes said.
"This may be no more than a temporary blip but it could be hinting at the appearance of a 'feel-good' factor that could signal a step-up in consumer spending and a more rounded Irish economic recovery through 2018."
Hughes said the financial crisis is still a significant constraint on confidence but the recent data suggests its impact might be diminishing.
"Irish consumers are increasingly looking forward rather than back," he added.