Bank of Ireland has released its latest economic pulse today. 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.
The Bank of Ireland Economic Pulse fell in September as households and firms remained on edge. The index, which combines the results of the Consumer and Business Pulses, stood at 76.2 in September 2019, down 2.9 on last month and 16.5 lower than a year ago.
This month’s survey took place amid turbulent scenes in the UK. In the wake of Prime Minister Johnson’s decision to prorogue Parliament, the House of Commons and House of Lords passed legislation aimed at preventing a no deal Brexit at the end of October. But with economic sentiment down again this month – albeit by less than in July and August – households and firms here look to have taken only limited comfort from this.
Worries about the economy took centre stage once again and households downgraded their assessment of the current situation and prospects for the coming year. And with few giveaways expected in the upcoming Budget, they were also a touch gloomier about the outlook for their own pockets. Buying sentiment was little changed on the month though, with one in three considering it a good time to purchase big ticket items like furniture and electrical goods.
Brexit remains a big concern for firms, with almost nine in ten expecting it to negatively impact the local economy in their region in the coming year. As for other aspects of the operating environment, the September survey finds a high level of satisfaction among firms with basic infrastructure like water, waste and energy but a broad level of dissatisfaction with housing.
Uncertainty and stretched affordability in parts of the country are tempering sentiment; with households in all regions bar Connacht/Ulster paring back their expectations for future price gains this month. Rising supply has also helped take some of the edge off the market, though there is still a shortage of accommodation.
This is a concern for businesses as well as individuals, with firms in Dublin, Munster and the Rest of Leinster citing housing as the priority area for investment to strengthen local economies.
Commenting on Bank of Ireland’s September Economic Pulse research, Group Chief Economist for Bank of Ireland, Dr Loretta O’Sullivan said, "September was a turbulent month in the UK following Prime Minister Johnson’s attempt to suspend parliament and even though MPs took steps to block a no deal Brexit, uncertainty is continuing to affect economic sentiment in Ireland."
She added, "The Consumer and Business Pulses dropped for a third month running taking both series to new lows. The regional readings were also down, as a picture emerged of households and firms on edge, with little expectation of the upcoming Budget providing any major relief."