Economic Pulse plunges to four-year low amid COVID-19 disruption

Businesses lead the sharp decline

Households downgrade assessment of the economy’s prospects

Buying sentiment dips in March

The Bank of Ireland Economic Pulse came in at 70.4 in March 2020, the lowest reading since it started to track sentiment just over four years ago. The index, which combines the results of the Consumer and Business Pulses, was down 16.0 on last month and 19.0 lower than a year ago.

With the COVID-19 pandemic weighing on the global economy, upending financial markets and disrupting travel and tourism, consumer and business confidence took quite a knock this month. And as the March surveys were largely conducted before the Government announced the closure of schools and other restrictions impacting normal every-day and economic activities, both will likely be dealt another blow next month.

Commenting on Bank of Ireland’s March Economic Pulse, Dr Loretta O’Sullivan, Group Chief Economist for Bank of Ireland said: “The March survey findings give an initial feel for how the COVID-19 pandemic is playing out in economic terms. Overall they paint a bleak picture, with the Economic Pulse plunging to a new low and registering a larger monthly drop than after the Brexit referendum result. The Business Pulse also posted a series low in March with the services sector leading the charge downward, while on the consumer front, worries about the economic outlook were to the fore. Looking ahead, the school closures and other restrictions that have been put in place to contain the spread of the virus mean that this month’s weak prints are likely only the tip of the iceberg.”

Consumer Pulse

  • “Households’ worries about the economy were back with a bang this month.”
  • Consumer Pulse down in March
  • Households gloomier about the economy and their own financial prospects

At 78.5 in March 2020, the Consumer Pulse was down 5.4 on last month and 4.0 lower than a year ago. Having abated in February, worries about the economic outlook re-surfaced this month as the new government formation talks made little progress and the coronavirus arrived on Irish shores. Households markedly downgraded their assessment of the economy’s prospects for the coming year and were also more circumspect about their personal finances going forward. Buying sentiment dipped this month too, with just over three in ten considering it a good time to purchase big ticket items compared with 35% in February.

Housing Pulse

  • ”It was a full sweep of the country this month, with house price expectations softer in all regions.”
  • Housing Pulse loses ground in March
  • Two in five households think prices will rise in the next 12 months
  • One in seven expects a fall

The Housing Pulse stood at 77.5 in March 2020 (this was down 7.2 on last month’s reading). Households scaled back their expectations for future house price gains this month, though the balance of responses remained in positive territory.

Regional Pulse

The Bank of Ireland Regional Pulses bring together the views of households and firms around the country. The results for March 2020 (3 month moving average basis) show that sentiment was down on the month across the board.

  • Dublin Pulse = 80.0 -8.3 points on the previous survey;
  • Rest of Leinster = 81.3 -0.9;
  • Munster = 80.4 -2.0;
  • Connacht/Ulster = 83.2 -2.1. points.