Firms more upbeat but consumers wary: BoI

Businesses got a bit more upbeat as the threat of a crash-out Brexit receded but households remained downbeat, according to a Bank of Ireland survey.

It brings together surveys on business sentiment and personal finances for “economic pulse” readings for the country and regions.

The political agreement between the EU and Britain over a transition deal —which has yet to be fully approved by MPs — lifted business optimism last month even as business remains significantly less upbeat than in October 2018.

Confidence picked up in services and construction but weakened in retail and industry. And a third of firms said that recruitment challenges will mean they increase wages by 3.6% in the next 12 months, according to the survey. Consumers were a lot less upbeat, however.

"With Brexit uncertainty continuing to unnerve households, the consumer pulse tracked lower again this month” and many households are putting off buying expensive items, said Bank of Ireland chief economist Loretta O’Sullivan.

“Households were gloomier about the economy and their own finances, with buying sentiment also taking a knock as Brexit weighed on minds and Budget 2020 did little for consumers’ pockets. Just a quarter of those surveyed considered it a good time to purchase big ticket items such as furniture and electrical goods,” states the survey.

By region, sentiment fell the most in Munster and in the Leinster region outside of Dublin.

Meanwhile, most directors surveyed by the Institute of Directors (IoD) said they want Irish-British relations to be repaired following the differences over Brexit.

The survey found 96% of business leaders said Brexit would be bad for the Irish economy in the short term while 1% of the survey said it would be positive.