Brexit concerns push Bank of Ireland's Economic Pulse index lower

Brexit once again hit business sentiment in March while households also remained jittery about the outlook for the economy, a new survey shows.

The Bank of Ireland Economic Pulse showed a reading of 89.4 for March, down 1.4 on last month and 7.7 on a year ago. 

The index combines the results of the consumer and business pulses.

At 91.1 in March 2019, the Business Pulse was down 2.1 on last month and 5.7 lower than a year ago. 

Bank of Ireland said that all four sector pulses lost ground this month, with firms in industry, services and construction reporting softer order books and retailers taking a dim view of the recent trading period. 

Uncertainty remains a drag and with clarity on the Brexit front still lacking, 58% of firms impacted by the UK's decision to leave the EU indicated they had paused their investment plans for this year.

Meanwhile, the Consumer Pulse stood at 82.6 in March 2019, up 1.5 on last month but down 15.8 on a year ago. 

The bank said positive developments on the jobs and earnings fronts buoyed households a little in March.

"Their assessment of the economy's prospects for the coming year was little changed however, with the balance of positive and negative responses remaining firmly in the red amid ongoing Brexit uncertainty," it added. 

Bank of Ireland's Housing Pulse came in at 97.7 in March 2019, down 2.1 on last month. 

The bank said the Central Bank's mortgage rules and increasing supply continue to take some of the edge off the market.

It added that a general cooling in house price expectations and an easing in the annual rate of house price inflation have also been evident over the past while. 

Dr Loretta O'Sullivan, Bank of Ireland's group chief economist, said that uncertainty around how and when the UK is going to leave the EU tempering the mood. 

"It has been a tumultuous few weeks and with the political drama in Westminster dominating the headlines and events coming down to the wire, it is no surprise that Brexit worries come through strongly in this month's survey results," the economist said.