Bank of Ireland has today released its latest Economic Pulse survey 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.
With the virus situation stabilising, inoculations going up, some easing of Level 5 restrictions – the return of in-school education and residential construction - and more expected over the coming months, sentiment among households and especially firms rose again this month. As a result, the Economic Pulse is now fast approaching its pre-pandemic level.
The Business Pulse was 14.3 higher than last month and up 59.3 on a year ago. The improvement in sentiment was broad based, with all four sectoral Pulses – industry, services, retail and construction - posting higher readings this month amid a modest easing of public health restrictions and the expectation of more to come.
Some 53% of firms are anticipating a pick-up in business activity in the near term, while almost a quarter expect to employ more people. Three in ten also indicated that they are planning on increasing basic pay over the next 12 months, though the majority are set to stay on hold for the time being as they focus on restoring profitability.
The Consumer Pulse rose for a third month running in April 2021 to 71.7. This was 1.9 higher than last month’s reading and up 18.5 on a year ago. Households were more positive about the economy and their own finances this month, with the share saying that they are holding out on spending easing to 42% (from 61% during the first lockdown) and the share considering it a good time purchase big ticket items like furniture and electrical goods ticking up to 28%.
The Housing Pulse stood at 107.9 in April 2021, up 10.6 on March and 82.9 higher than last April’s trough. Households in all regions raised their expectations for future house price gains this month, taking the index to its highest level since the autumn of 2018. The survey also finds that 36% plan to spend a large sum on home improvements over the coming year. Bank of Ireland say this likely reflects a combination of increased savings and the view that remote or hybrid working will be a feature of the post-COVID landscape for some.
Commenting on the April Economic Pulse, Group Chief Economist for Bank of Ireland, Dr Loretta O’Sullivan said, "The Economic Pulse rose again in April, making it a hat-trick of gains. Both the consumer and business mood brightened this month, helped by the baby steps being taken to restart the economy and society and the expectation of a more widespread re-opening as we head into the summer."
She added, "But while households were along for the ride, it was firms who were behind the wheel driving the improvement in the headline index in April. Businesses were also pretty upbeat about growth prospects further out, with three in five having ambitions to expand in the next one to three years, which is in line with the pre-COVID figure."