Irish business sentiment is still above pre-pandemic levels according to a Bank of Ireland Economic Pulse survey, despite soaring inflation.
It shows that business sentiment fell back slightly in April, albeit with more pronounced declines in the construction and retail sectors.
However, the aggregate survey reading at 88.7 is still well above pre-pandemic levels.
The invasion of Ukraine and the surge in energy prices have thus far had little impact on the headline survey measure.
Notably, 55 per cent of firms still indicated that they plan to expand their business over the next 1-3 years, with one-third saying they were experiencing labour shortages.
The Consumer Pulse survey fell again in April – now close to the October 2020 trough during the pandemic.
Several Irish energy companies announced or implemented substantial electricity and natural gas price hikes of 20-40 per cent in April.
Hence, households were more downbeat, not only on the current economic situation but also on prospects for their own personal finances.
Just 19 per cent thought now was a good time to make a major purchase and 57 per cent indicated that they were holding back on spending due to uncertainty.
Irish households may be paring back their own spending due to recent events in Ukraine and the surge in energy prices, but they don’t expect the uncertainty to have any impact on the housing market.
The Housing Pulse rose in April, close to its highest level in four-and-a-half years.
Close to 80 per cent of survey respondents expect house prices to rise over the next year and 76 per cent believe it is cheaper to buy than to rent.
Notably, 28 per cent said they expect to carry out renovations over the coming year, perhaps indicative of higher levels of home working