Irish consumers ‘more upbeat’ on economy in June

In the weeks before Brexit, consumer sentiment among Irish households had been "more upbeat about the outlook for the economy", according to the latest Bank of Ireland "Economic Pulse" survey.

Broadly speaking, the indicators for June were favourable in comparison to May, although a changed measure of business and consumer sentiment is likely to emerge in the next set of results, following the UK’s vote to leave the EU.

Bank of Ireland described June results as “solid”, the overall pulse standing at 101.5, up just 0.2 points on May.

Chief economist Dr Loretta O’Sullivan said that, while a higher number of firms in June had downgraded assessment of business prospects for the next three months through the summer, those continuing to expect an increase in activity outweigh those expecting a decrease.

“The overall business pulse remains at a high level. The consumer pulse is up on last month and more than one in three households surveyed think that now is a good time to purchase big ticket items such as furniture and electrical goods,” Ms O’Sullivan said.

“The research was conducted prior to the UK’s EU referendum last week so we may see some impact from this in next month’s surveys.”

The business pulse, engaging 2,000 companies, was down marginally on May (0.4 points); construction registered a strong gain (9.6 points); services and retail were both slightly down (0.4 and 3.0) on sharp May gains, as was industry (losing 0.9 points). However construction, services and retail had all risen over the first half of the year.

The “housing pulse” rose to 105.9 in June (from 104.0 in May). The results showed 77 per cent of Dublin households expected house prices to increase over the next 12 months.

That measure was 71 per cent for the rest of Leinster, 68 per cent in Munster and 56 per cent in Connacht and Ulster.

The share of respondents expecting house and rental prices to increase by more than 5 per cent over the coming year was slightly higher in June.

“The cost of renting is an issue that has been coming through in the survey findings for some time now; with households in general, and students and the unemployed in particular, citing it as one of their main concerns”, said Ms O’Sullivan.