BoI Economic Pulse Shows 1 in 3 Firms Planning Pay Rises

The Bank of Ireland Economic Pulse is an indicator for Ireland based on a series of surveys. Each month households and firms are asked for their views on a wide range of topics including the economy, their financial situation, spending plans, house price expectations, business activity and hiring intentions.

Key business sectors such as industry, services, retail and construction are covered, as well as regions. The information gathered is combined into high level indices, with responses to individual questions also provided along with analysis and insights..

Bank of Ireland is partnering with the European Commission on the surveys. The data collected will feed into the Joint Harmonised EU Programme of Business and Consumer Surveys. This is a Europe-wide sentiment study which has been running since the 1960s. The data generated within this framework are particularly useful for monitoring economic developments at EU and Euro area level and also allow for the situation in Ireland to be compared with that of other Member States.

At 93.4 in July 2017, the Business Pulse was up 2.7 on June’s reading and 1.8 on a year ago. The Industry Pulse rose for a fourth month running in July, with larger firms generally more positive. The Services and Construction Pulses also picked up in the month, whereas the Retail Pulse remained relatively subdued. While Brexit is a worry for many firms and the related uncertainty has taken a toll on sentiment, two in three businesses still have ambitions to expand over the next 1 to 3 years. Of these, one third is looking to actively pursue opportunities to grow, with the other two thirds adopting a more cautious approach to growth.

Group Chief Economist with Bank of Ireland Dr Loretta O’Sullivan said: ”On the wage front, one in three firms are planning on increasing basic pay in the next 12 months, while two in five workers are expecting a pay rise.”

“The business mood brightened this month with firms in the industry, services and construction sectors more upbeat. The Business Pulse is still off its pre-Brexit levels though.”

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