Consumers expect more rental hikes
More than two-thirds of consumers are bracing for rent hikes and house prices to rise in the next 12 months, while some businesses are holding back on activity as ongoing global uncertainty continues.
Those were some of the findings of Bank of Ireland’s monthly economic pulse, which measures consumer and business sentiment.
Consumer sentiment was up slightly from last month, but still down sharply from the same month last year, Bank of Ireland said.
Households were more upbeat about the ‘here and now’ this month, but remain worried about where the economy is going next, the bank said.
Group chief economist for Bank of Ireland, Loretta O’Sullivan said: “Having nosedived earlier in the year, consumer confidence was a touch firmer this month, while business sentiment moved sideways.”
Ongoing uncertainty and tensions on the external front has led to caution from businesses, she said.
Yesterday marks three years since the UK referendum on EU membership which set Brexit in train. Thirty-six months on and uncertainty about the leaving process and the future trading relationship is still clouding the horizon.
She said Donald Trump’s protectionist stance back in 2016 “was pure rhetoric but has since turned into policy action, making heightened trade tensions a key risk for the global economy”.
“While things have been going well at home, the openness of our economy means that the Brexit and Trump curve balls have taken a toll on sentiment. And over the coming months, good or bad news on these fronts will likely further buffet consumer and business confidence.”
Over two in five builders are finding it difficult to get workers, and that uncertainty is also holding back housing activity, the pulse found.
“Two in three households still think price increases are on the cards over the next year,” Ms O’Sullivan said.
“This is partly because the number of units coming on stream remains well shy of the number needed. And with our survey of construction firms finding that a shortage of workers and uncertainty is limiting building activity, this gap isn’t likely to be closed any time soon.”
