The latest Bank of Ireland Economic Pulse has been released today. The Bank of Ireland Economic Pulse survey is carried out in conjunction with the European Commission, with the data feeding into the EU Commission’s Joint Harmonised EU Programme of Business and Consumer Surveys, a Europe-wide sentiment study running since the 1960s.
The Economic Pulse surveys are conducted by Ipsos MRBI on behalf of Bank of Ireland with 1,000 households and over 2,000 businesses on a range of topics including the economy, their financial situation, spending plans, house price expectations and business activity.
The pulse came in at 91.8 in June 2017. The index, which combines the results of the Consumer and Business Pulses, was down 0.6 on May’s reading and 9.7 on this time last year.
The Consumer Pulse gathered pace in June 2017, coming in at 96.4. This was up 2.3 on last month and its highest reading since the Brexit vote. Households upgraded their assessment of the economy this month and were also more positive about their personal finances.
The buying climate was little changed, with 37% considering it a good time to purchase big ticket items such as furniture and electrical goods. On the savings front, two in three indicated that they are likely to put money aside over the next year, with younger cohorts, students and those living with family leading the way.
Meanwhile, the Business Pulse stood at 90.7 in June 2017, down 1.4 on May and 12 on this time last year. The Services, Retail and Construction Pulses all fell in the month, whereas the Industry Pulse picked up. With thoughts turning to the start of the Brexit negotiations and the inconclusive outcome of the UK general election weighing on minds, firms in each of the four sectors scaled back their expectations for business activity and hiring over the next 3 months.
Speculation about the future of the help-to-buy scheme for first time buyers – which is under review at the moment – may also be having an impact on construction sentiment which saw a large drop in June.
The Housing Pulse eased back for a second month running in June 2017 to 114.2, though it is still at an elevated level and 8.3 higher than this time a year ago. While the majority of those surveyed expect house prices to increase in the next 12 months, the balance between positive and negative responses was down a little in June in all regions bar the Rest of Leinster. The on-going mismatch between supply and demand is impacting the rental market as well, with the cost of renting a key concern for two in five households.
Commenting on the Economic Pulse, Group Chief Economist at Bank of Ireland, Dr. Loretta O’Sullivan said, "A year on from the referendum and the UK’s decision to leave the EU, the Bank of Ireland Economic Pulse is still significantly off its pre-Brexit levels. It was a mixed picture once again this month, with the Consumer Pulse gaining some ground but the Business Pulse giving up some."
She added, "While households were more positive about the economy and their own financial situation, the uncertainty generated by political shifts including the Conservative party losing its majority in the UK parliament weighed on business sentiment."
Source: www.businessworld.ie
