‘Lit­tle Bud­get im­pact’ as con­sumer con­fi­dence up

Irish Independent - - Business - Gavin McLough­lin

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

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