One in four Irish consumers are planning major home improvements

Economic sentiment has hit a fresh post-Brexit high...

One in four Irish consumers are planning major home improvements

Gareth Fuller/PA Wire/PA Images

Consumers and businesses are feeling confident about the Irish economy's short-term prospects, according to the Bank of Ireland's Economic Pulse report.

It rose by 4 points to 95.1 in April - compared to the previous month. That was 0.9 lower than 12 months ago - which was before the UK's Brexit vote.

The report notes that, "While the unsettled external environment and Brexit in particular remains a worry, households and firms appear to have taken the triggering of Article 50 – and also the recent industrial unrest at home - in their stride."

This was the most positive reading since Britain voted to leave the EU.

Commenting on the impact that the UK's exit will have in the coming months, Dr. Loretta O’Sullivan, Group Chief Economist, Bank of Ireland said:

"We are heading into a couple of interesting months with the withdrawal negotiations getting underway and elections across Europe. So it may be a case of time will tell whether the improvement in sentiment this month is temporary or if it will be sustained."

She added that the UK's snap General Election it likely to create greater uncertainty in the coming months.

Property

On the property front, it looks like prices are only going one way. 39% of respondents believe that prices will increase by more than 5% in the next year - that's a significant jump on the 32% who expected a 5% hike last month.

Half of those based in the capital expect a further 5% jump.

More than one in four (27%) indicated that they are likely to spend a large sum of money on home improvements in the coming year.

Spending

On the consumer front households took a more positive view of the economy this month and, with the Budget 2017 increases in pension and other social welfare payments kicking in, were also more upbeat about their current financial situation.

38% of people are considering big ticket purchases like expensive electronic goods or furniture.

Meanwhile, just over one in four said that they are considering buying a car in the next year.

The survey found that most Irish firms are in growth mode, with two in three having ambitions to expand their businesses in the next 1 to 3 years.

"On the wage front, 41% of firms in industry, 33% in the services and construction sectors, and 28% of retailers expect to increase basic pay in the next 12 months," Dr O’Sullivan added.