World Economy

Irish Consumer Confidence Eases

Close to 72% expect rents to go up this year.Close to 72% expect rents to go up this year.

A new survey shows that Ireland’s consumer confidence index eased in December, while business sentiment was mixed across the various industries.

Bank of Ireland’s Economic Pulse, which is conducted in conjunction with the European Commission, stood at 88.9 in December, down 1.5 on the November reading and 3.5 points lower than the same time last year, RTE reported.

The bank’s chief economist Loretta O’Sullivan said that 2017 was broadly a good year for households with consumer confidence on a broadly upward trajectory, but business sentiment has moved in the opposite direction and has hit overall sentiment in the process.

Today’s survey shows that the consumer element of the index eased to 94.7 in December from 95.9 in November as households downgraded their assessment of the economic situation. Households were also slightly less positive about the buying climate with 34% considering it a good time to buy a big ticket item compared to 36% in November.

However, the index was 5.3 points higher than this time last year on the back of the growing economy and ongoing jobs and income gains.

Today’s survey shows that the business element of the Bank of Ireland economic pulse fell by 1.6 points to stand at 87.5 in December. The bank reported a mixed picture, with the industry and retail pulses advancing, while the services pulse fell a little and the construction pulse slumped, albeit after a strong November reading.

The bank noted that all four sectors ended the year below from where they had started. The bank also noted that the survey took place in the middle of the tough Brexit negotiations, which may have impacted the readings.

Meanwhile, the housing element of the survey was broadly unchanged in December compared to November with a reading of 117 as house price expectations were firmly in positive territory this month.

Four in five survey participants expect house prices to rise over the next 12 months, with two in five expecting gains of over 5%. But rising house prices are still worrying for 38%, and while the supply of housing is increasing, it remains well below demand and is not likely to catch up for some time.

The bank further said this is putting pressure on rents and 43% of people surveyed are worried about the cost of renting with 72% expecting rents to go up this year.

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