Bank of Ireland released its latest Economic Pulse survey this week which is conducted by Ipsos on behalf of Bank of Ireland with 1,000 households and 1,350 businesses on a range of topics including the economy, their financial situation, spending plans, house price expectations and business activity.
The Bank of Ireland Economic Pulse came in at 67.2 in November 2022. The index, which combines the results of the Consumer and Business Pulses, was up 6.7 on last month but 16.0 lower than a year ago.
The picture was mixed again this month. Households were uneasy about the jobs’ outlook and with the cost-of-living squeeze putting a dent in Christmas spending plans, the consumer mood was more gloom than cheer as the run-up to the festive season got underway. In contrast, the Business Pulse clawed back some of the ground it lost last month.
The survey findings point to a more muted Christmas trading period than usual – two thirds of retailers expect their turnover to be the same or higher than last year versus 85% in the pre-pandemic era. This month’s research also took a look at businesses’ investment plans. The data shows that a third intend to increase spending in 2023 compared with this year, with the replacement of worn-out plant and equipment, expanding production capacity, streamlining processes and meeting sustainability and other objectives all on the agenda.
Households were more circumspect about prospects for the economy and the labour market this month, with 56% now expecting unemployment to increase over the next year (up from 49% last month). On the buying front, the November survey indicates that Christmas shopping plans have also been reined in. While three in five said that they intend spending the same or more on presents this year compared with last, this is down from three in four in 2021.
Commenting on the November Economic Pulse, Group Chief Economist for Bank of Ireland, Dr Loretta O’Sullivan said, "The latest survey findings are a mixed bag, with the Consumer Pulse down on the month and the Business Pulse up. While the Irish economy has been benefitting from the removal of pandemic-related restrictions and strong employment growth this year, the war in Ukraine has had a knock-on effect to inflation. It has also led to a global slowdown. This is a headwind for exporting sectors including ICT, and the news of layoffs in some high profile tech companies may have unsettled households this month."
She added, "However, November’s research also finds that 32% of firms expect to spend more on investment in 2023 compared with 2022. Though down from 38% a year ago, this is nonetheless a solid print, and with government supports helping households to mitigate increased energy and other costs, our new forecasts still have GDP growing by 4.0% next year."