Deep Gloom Pervades Irish Business

27 Apr 2020 | 09.24 am

Deep Gloom Pervades Irish Business

Bank of Ireland Economic Pulse

27 Apr 2020 | 09.24 am

The Bank of Ireland Economic Pulse came in at 34.3 in April, the lowest reading in its history.

The index, which combines the results of the Consumer and Business Pulses, was down 36.1 on March and 57.0 lower than a year ago.

Three in five firms said they expect a further decline in business activity in the coming three months and just over a quarter anticipate having to lay off staff.

The Business Pulse posted a historic low in April 2020, coming in at 29.6. This was down 38.8 on March and 63.7 lower than a year ago. Seven in ten firms reported lower business activity.

Industry Services Retail Construction
Reduced demand from domestic customers 80% 83% 76% 83%
Reduced demand from overseas customers 34% 33% 25% 7%
Supply chain disruptions 62% 36% 64% 73%
Operational difficulties 75% 76% 76% 84%
General economic slowdown 79% 80% 82% 90%
Seeing new opportunities 31% 31% 31% 22%
No impact 2% 2% 1% 2%

 

The Pulse surveys are conducted by Ipsos MRBI on behalf of Bank of Ireland with 1,000 households and c.2,000 businesses on a range of topics including the economy, their financial situation, spending plans, house price expectations and business activity.

Three in five households indicated that they are holding out on spending because they are not certain which way economic policy is going to go.

Bank of Ireland economist Dr Loretta O’Sullivan (pictured) described the survey findings as grim in the extreme.

“With the country more or less in full lockdown, job losses soaring and incomes under pressure, consumer and business confidence both tanked in April,” she added.

“The Covid-19 shock is unprecedented and has resulted in a sudden turnaround in the economy’s fortunes. With the economy and the labour market going into reverse, consumer confidence also tumbled in April.”

The Consumer Pulse stood at 53.2 in April 2020, down 25.3 on March and 30.3 on a year ago.

Expectations for house price gains over the coming year have fallen sharply. For the first time since sentiment started to be tracked in January 2016, more households now expect prices to decline (55%) than go up (one in seven). Households’ expectations for future rent increases also headed into negative territory.

 

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