Monday 29 May 2017

Economic sentiment recovers in Ireland in the wake of Brexit poll

While the retail pulse registered a strong pick up to 89.7 in October, the services and construction pulses also showed favourable increases, with the industry pulse falling by 2.4 points. Photo: Getty (stock image)
While the retail pulse registered a strong pick up to 89.7 in October, the services and construction pulses also showed favourable increases, with the industry pulse falling by 2.4 points. Photo: Getty (stock image)
Colm Kelpie

Colm Kelpie

Economic sentiment is recovering here in the wake of the Brexit vote, according to Bank of Ireland.

But its latest economic pulse survey showed the uptick was led by business sentiment - which was up last month - while consumer sentiment has fallen slightly.

Dr Loretta O’Sullivan
Dr Loretta O’Sullivan

The business pulse - which surveyed 2,000 businesses - stood at 94.9 in October, up 5.3 points on September, with three of the four key sectors rising.

While the retail pulse registered a strong pick up to 89.7 in October, the services and construction pulses also showed favourable increases, with the industry pulse falling by 2.4 points.

Dr Lorretta O'Sullivan, the bank's chief economist, said the economic pulse picked up in October and has now recovered around a third of the ground it lost in July following the UK's decision to leave the EU.

"The October survey findings indicate that the majority of firms remain ambitious with two in three looking to expand in the next one to three years," said Dr O'Sullivan.

"On the wage front, 40pc of firms in industry, 38pc in services, 34pc in construction and 28pc in retail are planning on increasing basic pay in the coming 12 months, to the tune of 2pc to 4pc in the main. Overall, a solid increase in business sentiment is a welcome feature of the October data."

The pulse also analysed the ability of firms to compete in EU markets, pointing to a general softening in competitiveness over the course of 2016, particularly for businesses selling into EU markets where the depreciation of sterling against the euro is a key factor.

The consumer pulse, conducted with 1,000 households, softened slightly. But Dr O'Sullivan said the measures in the Budget could give this a boost. The housing pulse rose to a 2016 high of 107.4 in October).

The share of respondents expecting prices to increase over the next 12 months jumped in the month.

Irish Independent

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