Irish Less Upbeat About Economic Prospects

Bank of Ireland Monday released its latest economic pulse survey which was conducted by Ipsos MRBI on behalf of Bank of Ireland with 1,000 households and over 2,000 businesses on a range of topics including the economy, their financial situation, spending plans, house price expectations and business activity.

The results show that Irish households were less upbeat about economic prospects this month, while the business picture was little changed. With the festive season approaching, one in five indicated that they plan on spending more on Christmas presents this year compared with last year, while 57% intend to spend about the same. Similarly, 28% of retailers expect their Christmas turnover to be up on last year, with around half expecting it to be much the same, Business World reported.

While the retail pulse lost some ground, this comes on the back of a strong performance last month and broadly positive expectations for the Christmas trading period. The November data also show that two in five businesses expect to spend more on investment in 2018 compared with this year.

A range of factors were mentioned as having an impact on firms’ plans, with demand from customers, financial and technical conditions generally seen as supportive. The ‘wait and see’ approach to investment decisions that many Irish firms adopted this year in response to Brexit-related uncertainty seems set to continue into 2018 though, with around half of those affected by the UK’s decision to leave the EU putting their plans on hold.

The results also show that the majority of survey respondents expect house prices and rents to increase over the coming 12 months, with Dublin ahead on both fronts. The Housing Pulse stood at 117.4 in November, down 2.5 on last month but up 9.2 on a year ago, with over one third (35%) worried about rising house prices and cost of renting a concern for 42%.

Commenting on the economic pulse, group chief economist at Bank of Ireland,  Loretta O’Sullivan said, “The protectionist nature of (US President Donald) Trump’s policy agenda is a concern for Ireland because of the open, export-orientation of our economy and the importance of foreign direct investment by US multinationals. Reflecting this, economic pulse research conducted earlier in the year with Irish firms for whom prospective US policy changes are a live issue found that roughly one in four in the industry and services sectors had pressed the pause button on their investment plans for this year.”