Irish consumer and business sentiment has plunged in the wake of the UK's decision to quit the EU, according to a report by Bank of Ireland.
The BoI Economic Pulse fell by 10.3 points in July, to 91.2, its lowest reading so far this year, with the mood among business firms following at a faster pace than consumers.
“Our business pulse fell sharply in July, with near-term prospects being downgrade and the fall in sterling a concern for some firms,” said Loretta O’Sullivan, chief economist at the bank.
“Over the course of the year,” she added, “there has been a notable step-up in the number of service, retail and construction firms citing uncertainty as a key factor currently limiting their business.”
Plunging reading
The business index fell by 11.1 points from June to 91.6 in July, with the reading among retail and construction firms plunging between 18-21.5 per cent.
Business sectors, also including service firms and those in industry, have pared back their hiring plans for the next three months, though most still forecast growth in their business over the next one to three years.
Nearly 40 per cent of firms in industry and services plan to increase basic pay over the next 12 months, with 35 per cent in construction and 25 per cent in retail eyeing similar moves.
The consumer index fell by 7.1 points to 89.7 in July, as householders lowered their assessment of their own financial situation, the outlook for the economy, and the pace at which unemployment levels are expected to keep falling.
Jobless unchanged
The Irish jobless rate stood at 7.8 per cent in June, unchanged from May but down from a peak of 15.1 per cent at the height of the financial crisis in 2012, according to the Central Statistics Office.
The July surveys were carried out by Ipsos MRBI on behalf of Bank of Ireland, with 1,000 households and 2,000 businesses questioned on a range of topics.
Meanwhile, 67 per cent of respondents said they expect house prices to continue to rise over the next 12 months, while 62 per cent saw rents increasing.
The latest CSO data show that home prices rose by 6.9 per cent on the year in May, driven by segments of the market outside of Dublin. Prices nationally remain 35 per cent their 2007 peak.
