‘Little Budget impact’ as consumer confidence up
IRISH consumer confidence and business sentiment has risen in October, but it doesn’t have much to do with the Budget, according to Bank of Ireland’s latest Economic Pulse report.
Bank of Ireland chief economist Loretta O’Sullivan said there was greater positivity among retailers and households.
“The uptick in the Economic Pulse this month looks to be less of a Budget bounce than an unwinding of last month’s temporary setback on the consumer side, and greater positivity among retailers which may be partly related to the time of the year and firms hiring for the Christmas period,” Dr O’Sullivan said.
“The mood among house- holds brightened this month, with business sentiment also improving, albeit the picture was mixed across the sectors.”
The report is a combination of separate consumer and business surveys conducted by the bank. It surveys 1,000 households and more than 2,000 businesses. The results showed improvements in sentiment in retail and construction, but industry and services were behind last month.
Disparities in sentiment between Dublin and the rest of the country were highlighted. In Dublin, sentiment was up but it was down everywhere else. The figures are based on a three-month average.
The data points to some softening in export orders for the coming three months, Bank of Ireland said. It found the weakness of sterling remains a key concern for firms exporting to the UK, as does Brexit-related uncertainty.
However, two in five businesses said they expected to increase basic pay over the next 12 months – up from one in three in July.
Dr O’Sullivan said the Budget measures did not appear to have a major impact on households. “Households were a focus of Budget 2018, with the USC and income tax changes and increases in social welfare payments supporting disposable incomes and spending power.
“But as the Budget day giveaways didn’t come as much of a surprise and were fairly modest, households’ assessment of their own financial situation was little changed this month, though there may be more of a reaction when the measures start to kick in,” she said.
The majority of respondents said they expect house prices to rise over the next 12 months. The percentage of respondents who felt prices would go up more than 5pc increased. In Dublin, 71pc of people thought it was a good time to sell – compared to 63pc nationally.
There’s more positivity in retail, says BoI’s Loretta O’Sullivan