Bank of Ireland has today 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 sentiment among households was broadly unchanged this month and remains upbeat, while the Business Pulse posted a two year high. Concerns about the stuttering Brexit talks, political developments in Europe and potential disruptions to global trade have come to a head in recent weeks though and may muddy the waters going forward, with a number of firms more circumspect about near-term prospects for business activity this month than in May.
Households’ assessment of the economy and their own finances was little changed on the month, resulting in a sideways move in the headline index. However, compared to last year it was up 2.5.
The buying climate improved this month, with four in ten considering it a good time to purchase big ticket items such as furniture and electrical goods, compared with 36% in May. The survey results show that households are keeping an eye on their savings as well and that seven in ten are likely to put some money aside over the coming year.
The Housing Pulse gave up some ground this month, coming in at 113.8. This was down 2.8 on last month but broadly unchanged on a year ago. Expectations remain in firm positive territory however, with three quarters (76%) of survey respondents expecting house prices to increase in the next 12 months and 73% expecting rents to go up.
Rising prices and the cost of renting are at the top of the worry list for younger households and may be influencing the higher incidence of savings among this cohort - almost nine in ten 16-29 year olds are planning on putting money aside in the next 12 months.
Commenting on the pulse, Group Chief Economist at Bank of Ireland, Dr Loretta O’Sullivan said, "The Economic Pulse has had a good run over the first half of 2018, averaging 95.9 compared with 92.7 in the same period of last year. Consumer confidence has moved sideways in recent months but remains at a high level, while business confidence has strengthened noticeably and is now at a two year high. The strong domestic economy is providing support and the global economy is also expanding. Recent developments externally could put a dent in the mood though."