Business Irish

Tuesday 22 October 2019

Brexit and Trump hit Ireland's business sentiment

Uncertainty: US President Donald Trump with wife Melania at an event in the White House at the weekend. AP Photo/Jacquelyn Martin
Uncertainty: US President Donald Trump with wife Melania at an event in the White House at the weekend. AP Photo/Jacquelyn Martin
John Mulligan

John Mulligan

Brexit and Donald Trump's volatile international relations are hitting Irish business sentiment, but consumers are in a holding pattern as summer beckons, according to the latest Bank of Ireland economic pulse data published today.

The survey found that with Ireland's economy performing strongly, households are more upbeat about their immediate financial situation.

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But it also found that consumers remain nervous about the broader outlook given the uncertainty in the UK and beyond. That nervousness is also evident among firms.

Bank of Ireland group chief economist Loretta O'Sullivan described the latest pulse reading - at 90.7 and up just 0.5 points on May's reading - as "relatively soft".

"Having nosedived earlier in the year, consumer confidence was a touch firmer this month while business sentiment moved sideways," she said.

She pointed out that it was three years as of yesterday that the UK voted to leave the European Union.

Ms O'Sullivan said that continuing uncertainty about the leaving process and the future trading relationship of the UK with the EU and the rest of the world "is still clouding the horizon".

"While things have been going well at home, the openness of our economy means that the Brexit and Trump curve balls have taken a toll on sentiment," she added.

"And over the coming months, good or bad news on these fronts will likely further buffet consumer and business confidence."

The latest survey put its consumer pulse reading at 90.6 for June. That's up 1.8 points on May's figure, but 8.3 points lower than a year ago. Still, buying sentiment amongst consumers edged higher.

With a reading of 90.7 for June, the business pulse was virtually unchanged compared to May, but 7.1 points lower than a year ago. Industrial and construction firms reported softer order books, while businesses more generally scaled back their expectations for the next three months.

More than 40pc of firms in the industry, services and retail sectors, and 60pc of builders, have seen a rise in non-labour input costs in the past three months.

Irish Independent

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