Irish consumer sentiment rose slightly last month while house price increases are expected to continue and more businesses are hoping to hire new staff in the next year, according to a new economic indicator.
Overall, the Bank of Ireland Economic Pulse suggests sentiment was largely unchanged last month, falling 0.2 to 96 between March and April.
However, consumers’ assessment of their own finances, compared to a year ago and over the next 12 months, improved in April with the balance between positive and negative responses increasing by 4%.
Almost four in ten (39%) consumers expect their household financial situation to improve over the next year, while 47% expect it to remain steady.
The Consumer Pulse stood at 95.6 in April 2016, up 3.6 on the figure for March.
Buying sentiment was also reasonably solid in April, as were saving intentions.
35% of households considered it a good time to purchase big ticket items such as furniture and electrical goods, while 66% indicated that they are likely to put money aside in the next 12 months.
Commenting on the results, Group Chief Economist with Bank of Ireland Dr Loretta O’Sullivan said: “Consumers are back spending on cars and this trend looks set to continue.
“The April Consumer Pulse finds that 26% are likely to buy a car in the next 12 months,” she added.
With regard to housing market sentiment, the majority of those surveyed anticipate price increases in the next year.
The Housing Pulse, which rose to 107 in April (+6.3 from March), indicates the mismatch between supply and demand in the housing market is affecting rents as well as rent expectations.
The Economic Pulse for April also suggests business sentiment eased a little in the month on the back of softer Industry and Services Pulse readings, although the Retail and Construction Pulses picked up.
The Business Pulse stood at 96.1 (-1.1) in April. In contrast, the Retail and Construction Pulses picked up.
The April data showed that all sectors are hiring new staff and that the number of firms expecting an increase in business activity over the coming months continues to exceed the number expecting a decrease.
The survey results also indicate around 40% of firms in industry and services are planning on increasing basic pay over the next 12 months, with 28% of construction firms and 27% of retailers expecting to do so.
Ms O’Sullivan said the Business Pulse for 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”.
The Economic Pulse is based on a series of surveys, with over 3,000 households and firms asked for their views on a wide range of topics each month.
They include the economy, personal finances, spending plans, house price expectations, business activity, and hiring intentions.
Ipsos MRBI is undertaking the fieldwork for the surveys on behalf of Bank of Ireland.
Bank of Ireland is partnering with the European Commission on the research, with the data used in the EU Commission’s Joint Harmonised EU Programme of Business and Consumer Surveys.
