The index for July revealed a sharp increase, with the index rising to 67.7 in July from 62.3 in June. The 3-month moving average also rose to 63.7 and the Index for July 2011 was 55.9.
Eddie Casey of the ESRI said that the latest consumer Sentiment index reveals a continuation in the upward trend visible since early 2012, having recorded increases in six of the last seven months. As a result, the index is now at its highest level since June 2010, yet it remains well below the historical average of 86.8.
"The strong July reading was buoyed by increases in both the current economic conditions sub-index and the forward-looking sub-index. In particular, consumers were notably less concerned about the general economic outlook and were more upbeat about their present financial situations."
KBC Bank said that Irish consumers remain cautious but their worst fears have receded. It noted there was no sign of any ''irrational exuberance''.
KBC's chief economist Austin Hughes said the July reading of 67.7 in still some distance below the near 17 year average of the survey of 86.8.
''The turn in Irish consumer sentiment is proving to be and extended an uneven process but it is nonetheless encouraging and suggests domestic spending may be beginning to stabilise,'' commented Mr Hughes.
''While the still fragile mood of Irish consumers could be derailed by poorer global conditions or renewed by domestic weakness, the July survey suggests that a gradual improvement in the circumstances of the Irish consumer is continuing to take hold,'' he added.
The strongest element of today's index is in relation to the outlook for the Irish economy over the next 12 months, posting its healthiest reading in almost five years. KBC said that this reflects the influence of the EU summit in June, solid Government exchequer figures and a favourable Troika assessment of our bailout programme.