Economic Pulse shows August gains for service and retail industries

Muireann Duffy

Bank of Ireland's (BOI) latest Economic Pulse has indicated a slight upturn from July prompted by a strong month for the retail and services industries.

August's Economic Pulse figures, which combine the result of the Consumer and Business Pulses, showed an improvement of 2.1 on last month's figures, however, remained 16.4 lower than August 2021.

The Business Pulse showed that retail performed well this month, noting a 3.7 increase on July, in addition to a 2.7 jump for services.

In contrast, industry suffered the largest month-on-month fall (down 4.2) while construction declined by 2.1.

BOI noted that the Consumer Pulse "recovered some losses this month, it remains subdued", still down 32.6 on last year.

While buying sentiment was little changed in August, with only 15 per cent believing it is a good time to purchase big ticket items like furniture, the upcoming budget saw lifted expectations for some.

For housing, 68 per cent said house price increases are on the cards (up from 63 per cent in July), while just over 70 per cent believe rents will rise.

"Recent shocks to the Irish economy – Brexit, the Covid-19 virus and Russia’s invasion of Ukraine – have been idiosyncratic in nature and their after-effects are still playing out, making for uncertain times," BOI's group chief economist Dr Loretta O'Sullivan said.

"The removal of pandemic-related restrictions earlier this year is a tailwind and employment has rebounded strongly, but the deterioration in UK-EU relations of late is a headwind and elevated global energy prices as a result of the war are adding to inflation.

"The squeeze on households’ purchasing power and unsettled environment for businesses have tempered confidence, though the August Pulse findings point to some respite in this respect."

"With households expecting the budget to provide some support for their pockets and firms seeing some easing in non-labour input costs, the mood was a little better this month and the Economic Pulse rose for the first time since May," Dr O'Sullivan added.