Half of Irish businesses expected to increase wages for employees this year 10 months ago

Half of Irish businesses expected to increase wages for employees this year

An extra bit of pocket money could be on your way...

Improvements in business outlooks could mean an increase to basic wages in the coming months.

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The good news was shared by Bank of Ireland as part of their Economic Pulse for January report.

The report takes several different factors including housing, business, and the economy into account, and provides a score for Ireland's current economic outlook.

1000 households, 300 industry firms, 500 services firms, 350 retailers and 200 construction firms participate in the surveys each month.

Ireland currently sits at a score of 84.5, an increase of 4.6 on the previous index reading.

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The business pulse found that half of the firms surveyed were planning on raising basic wages at some point in 2022.

Between 15% and 24% of firms in each sector predicted a wage increase of more than 4% for their employees.

Little to none of the firms surveyed anticipated any sort of drop in wages across their sectors.

Some sectors continued to have concerns for the future, however.

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The Construction Pulse was the only sector to see a reduction in their overall score from the previous report, sitting at a score of 91.0.

“The Economic Pulse was on the front foot this month as Omicron fears receded, with both the Consumer Pulse and the Business Pulse re-gaining some of the ground they lost late last year," said Dr Loretta O’Sullivan, Group Chief Economist for Bank of Ireland.

"Households and firms were cautiously hopeful that the peak of the virus wave was nigh and that restrictions would be gradually eased through February.

"So the Government’s announcement on 21 January that virtually all public health measures were to be removed more or less immediately came as something of a surprise.

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"It also came after the fieldwork for this month’s survey was carried out which suggests that economic sentiment may bounce further next month when the reaction to ‘Freedom Day’ is captured.

“For the economy, the lifting of Covid uncertainty is a welcome development, as are the hints in the January Pulse data that supply bottlenecks may be starting to ease.

"For example, 28% of firms indicated that they were struggling with material, equipment and space shortages this month, which is down from 34% in last October’s survey.

"A third of firms are continuing to experience labour shortages though and as businesses look to retain and attract staff in the months ahead, and workers find it easier to get or change jobs, some upward pressure on pay is likely.”

The full report is available on the Bank of Ireland's Economic Pulse webpage.

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