Press Releases

13 May 2016

Four in ten consumers expect household financial situation to improve, Bank of Ireland Economic Pulse shows companies increasing business 

Almost four in ten (39%) consumers expect their household financial situation to improve in the next 12 months, while 47% expect it to stay steady, according to Bank of Ireland’s new ‘Economic Pulse’ research launched today. More than half of companies across all sectors surveyed said they expect to increase business activity in the next three months. The Economic Pulse, which brings together the findings of consumer and business surveys, was broadly unchanged in April. 

The majority of consumers surveyed expect house prices and rents to increase over the next 12 months, and two thirds think it is cheaper to buy a property than rent in their area. One in three households considers it a good time to purchase big ticket items and a quarter intend to purchase a car in the next year. 

Bank of Ireland is partnering with the European Commission on the research. The data is used in the EU Commission’s Joint Harmonised EU Programme of Business and Consumer Surveys, a Europe-wide sentiment study running since the 1960s. The Economic Pulse surveys are conducted by Ipsos MRBI on behalf of the Bank with 1,000 households and over 2,000 businesses on a range of topics including the economy, their financial situation, spending plans, house price expectations and business activity. 

Economic Pulse 

The Bank of Ireland Economic Pulse stood at 96 in April, broadly unchanged on March. Dr Loretta O’ Sullivan, Group Chief Economist, Bank of Ireland said: “The Economic Pulse was broadly unchanged in April. The findings of the survey show that sentiment among consumers and firms remains at a high level. The consumer picture brightened in April, with households more positive about their own finances and also about employment prospects. On the business side, sentiment was a little softer. While the Retail and Construction Pulses picked up in the month, the Industry and Services Pulses eased back.” 

Consumer Pulse 

The Consumer Pulse was 95.6 in April 2016, up 3.6 on March. Consumers were more upbeat about their own finances, with the balance between positive and negative responses increasing by 4 points. Just over a quarter (27%) said that their household financial situation improved over the past year, with almost half (47%) seeing no change. One in three households (35%) considered it a good time to purchase big ticket items such as furniture and electrical goods, while a quarter (26%) said they are likely to buy a car in the next 12 months. 66% indicated that they are likely to put money aside in the next 12 months. Just over half (54%) expect unemployment to fall further. 

“Consumers are more upbeat about their finances. Two thirds see themselves saving money over the next year and one in three say it’s a good time to purchase ‘big ticket’ items. Consumers are spending on cars and, based on the survey feedback, this looks set to continue over the next year.” Dr Loretta O’ Sullivan, Group Chief Economist, Bank of Ireland 

Business Pulse 

The Business Pulse was 96.1 in April, a decrease of 1.1 on March. Sentiment was softer in the Industry and Services sectors but picked up in the Retail and Construction sectors. The April data shows that the number of firms expecting an increase in activity and employment in the next three months continues to exceed the number expecting a decrease. 

44% of Industry firms had seen an increase in business activity in the past three months, followed by 43% in Construction, 38% in Services and 37% in Retail. More than half of companies across all sectors surveyed said they expected to increase business activity in the next three months. 
One in five (20%) of Industry firms surveyed said they hired additional staff in the past three months, with one in four saying they intend to hire additional staff in the next three months. In Construction, one in ten (11%) had hired in the past three months and 28% said they intend to do so in the next three months. 
“The Business Pulse in April shows that a large number of firms are on a growth trajectory and looking to expand their businesses over the next one to three years.” Dr Loretta O’ Sullivan, Chief Economist, Bank of Ireland 

Housing Pulse 

The Housing Pulse was 107 in April, up 6.3 on March. The majority (71%) of those surveyed as part of April’s Housing Pulse expect house prices to increase over the coming 12 months, 23% expect them to stay more or less the same and 3% expect them to fall. Two thirds of consumers (66%) think it is cheaper to buy a property than rent in their area and two thirds (66%) said they expect rent to increase further in the next 12 months. 

“Consumers’ expectation is that both rents and property prices will rise over the next year. While we are seeing some regional disparity with more people in Dublin and the rest of Leinster predicting an increase in house prices, it’s generally quite strong across the country. Confidence that both property prices and rents are going to rise has increased since last month”. Dr Loretta O’ Sullivan, Group Chief Economist, Bank of Ireland 

Discussing the background to Bank of Ireland’s Economic Pulse research, Dr Loretta O’ Sullivan, Group Chief Economist said: “Our Economic Pulse provides a timely and comprehensive picture of the economic environment and consumer and business confidence. We’re pleased to be partnering with the EU Commission on the research project. The data generated are useful for monitoring economic developments at EU and Euro area level and allow for the situation in Ireland to be compared with other Member States.” 

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