Bank of Ireland has this week launched its latest Economic Pulse. The Economic Pulse surveys are conducted by Ipsos MRBI on behalf of Bank of Ireland with 1,000 households and approximately 2,000 businesses on a range of topics including the economy, their financial situation, spending plans, house price expectations and business activity.
Bank of Ireland say 2019 got off to a muted start, with growing fears of a no deal Brexit taking a toll on consumer sentiment in particular. As had been widely anticipated, Prime Minister May’s deal failed to make it through the UK Parliament the first time out.
This month saw households downgrading their assessment of the economic outlook once again, while the mood among firms remained subdued.
Households were gloomier about economic prospects this month, with the balance of positive and negative responses tipping into the red for the first time in three years. Their assessment of their own financial situation was little changed on the month though and, with the winter sales underway, 39% considered it a good time to purchase big ticket items like furniture and electrical goods while 29% are likely to buy a car in the next 12 months.
The share of households expecting house prices to rise by more than 5% over the coming year ticked up this month – particularly in Dublin - which helped boost the headline index. The January survey also finds that almost one in ten is planning on buying or building a property in the next 12 months, while just over a quarter are likely to spend a large sum of money on home improvements or renovations.
Brexit uncertainty continued to weigh on sentiment, with the weak pound also impacting the competitiveness of firms selling into the UK market and contributing to some easing in export orders in the industry and services sectors.
More positively though, the January data show that almost two thirds of businesses remain on a growth trajectory and have ambitions to expand – some aggressively, some more cautiously - over the next 1 to 3 years.
Commenting on the research, Group Chief Economist for Bank of Ireland, Dr Loretta O’Sullivan said, "It was less a case of the January blues and more a case of the Brexit blues this month. Reflecting this, the Economic Pulse rang in the new year more or less where it rang out the old – on a soft note. Uncertainty about how the UK will leave the EU has reached fever pitch in recent weeks, with talk of a no deal Brexit to the fore."
She added, "The analysis published last week by the Central Bank shows that a disorderly Brexit is an especially bad outcome for the Irish economy. Households are well aware of this, as their gloomier assessment of economic prospects in this month’s Pulse survey testifies."