Bank of Ireland has launched its latest economic pulse report today. The pulse report is 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 research shows that households markedly upgraded their assessment of the economy’s prospects this month and were also slightly more positive about their own finances. Buying sentiment ticked up as well, with 36% considering it a good time to purchase big ticket items like furniture and electrical goods (32% in April), while seven in ten are planning on spending the same or more on holidays this year compared with last year.
The Business Pulse came in at 90.6 in May 2019, down 2.7 on last month and 6.6 lower than a year ago. The sectoral picture was mixed however, with a pullback in the Services Pulse (mainly because larger firms were more subdued this month) and the Construction Pulse whereas the Retail and Industry Pulses advanced.
In industry, the May survey also finds that the share of firms reporting stocks of finished goods as being above normal for the season was higher than usual. This was the case in February and April too and suggests that businesses worried about supply chain or logistic disruptions in the event of a ‘no deal’ Brexit are engaging in some precautionary stockpiling.
Meanwhile, four in ten people surveyed were concerned about rising house prices. The share of households expecting house prices to increase over the coming year rose in all regions and now stands at three in four in Dublin and in and around the two thirds mark in the Rest of Leinster, Munster and Connacht/Ulster. On the rents side, the results show that expectations were also in firm positive territory throughout the country in May.
Commenting on Bank of Ireland’s May Economic Pulse research, Group Chief Economist for Bank of Ireland, Dr Loretta O’Sullivan said, "We’ve seen a mixed picture this month, with the Consumer Pulse doing some catching up and the Business Pulse easing back. The onset of summer, combined with a lull in Brexit news appeared to lift the mood among consumers. We’re also getting positive soundings from households in relation to their upcoming holiday spend, with seven in ten planning to spend the same or more than last year."
She added, "The dip in Brexit news has come to a dramatic end in recent days though, culminating with Prime Minister May’s resignation last Friday. But the question of how, when and if Brexit will be delivered remains as unclear as ever, which means continued uncertainty ahead and increased volatility for the pound, which has already weakened."