Decline in virus cases bringing greater certainty for the economy
CONSUMER sentiment in November increased to it highest level since March, boosted by positive news about the development of a vaccine against Covid-19.
With falling numbers of coronavirus cases and encouraging developments on the vaccine front helping reduce uncertainty about the economic recovery, expectations for the economy and jobs saw the biggest gains this month, according to the Bank of Ireland Economic Pulse.
The November survey also found that three in five households are planning to spend the same or more on Christmas presents this year compared with 2019. However, this figure usually runs at three in four, indicating that consumers remain cautious.
The Bank of Ireland Economic Pulse combines the results of data tracking consumer and business sentiment into a single index.
Sentiment can indicate how willing a person or firm is to spend and invest.
The chances of a swift recovery from the recession prompted by the Covid-19 pandemic and associated lockdowns will depend on how quickly both consumer and business sentiment recovers.
The Consumer Pulse came in at 60.3 in November, up 11.8 on October. While the Index is at its highest level since March, it was still 15.7 lower than a year ago. The Business Pulse looks at four sectors: construction, retail, services and industry.
It has improved month-onmonth, but it remains down on November 2019.
Sentiment was up monthon-month in the industry and construction sectors, neither of which were directly impacted by the move to Level 5 in October. Sentiment also improved in the services sector. This improvement reflected expectations that current restrictions will be eased over the festive season.
The lack of a breakthrough in the UK-EU negotiations is affecting business investment, with three in five firms for whom Brexit is a live issue indicating they have put their plans for next year on hold.
Dr Loretta O’Sullivan, chief economist for Bank for Ireland, said: “With no white smoke, impacted firms have pressed the pause button on their investment plans.”
The Retail Pulse changed little in November, with the survey findings pointing to a more muted Christmas trading period than normal.
One in two retailers expects their turnover to be the same or higher than last year versus 85pc typically, according to the Index.
Sentiment was up in the industry and construction sectors