Bank of Ireland has released its latest Economic Pulse which 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 pulse shows that a breakthrough on a COVID-19 vaccine lifted sentiment this month even as restrictions on social interactions and hospitality were tightened and non-essential retail / services businesses were closed. The lack of a breakthrough in the UK-EU negotiations is impacting investment though, with three in five firms for whom Brexit is a live issue indicating that they have put their plans for next year on hold.
With virus cases trending down and encouraging developments on the vaccine front helping to reduce uncertainty about the recovery, expectations for the economy and jobs saw the biggest gains this month. The November survey also finds that three in five households are planning to spend the same or more on Christmas presents this year compared with last year. This figure usually runs at three in four however, indicating that consumers remain cautious on the whole.
Households in Dublin, the Rest of Leinster, Munster and Connacht/Ulster were more upbeat about prospects for house prices this month, with the share expecting prices to increase over the next year coming in at 42%, more than double the share (20%) anticipating a fall. As for rent expectations, the balance of positive and negative responses was also in the black in all regions in November and a touch firmer at the national level on the month.
Commenting on November’s Economic Pulse, Group Chief Economist for Bank of Ireland, Dr Loretta O’Sullivan said, "While the Economic Pulse rallied this month, it was very much a case of the good, the challenging and the endgame. The good being the news that a vaccine is on the way, which raised households’ hopes that the economy will recover next year. The challenging being the current restrictions, though expectations that these will be relaxed for Christmas contributed to improved prospects for business activity."
She added, "And the endgame being the intensive negotiations now underway between the UK and the EU on a post-Brexit deal, but with no white smoke, impacted firms have pressed the pause button on their investment plans."