Consumer confidence steady, but business sentiment slips in September
Bank of Ireland said its latest Economic Pulse suggests that households and firms have taken the Government’s latest re-opening roadmap in their stride.
The bank said that with much of the economy already back operating and the public health situation under control, the consumer and business mood was little changed on the month.
Its headline Economic Pulse – which surpassed its pre-Covid reading in May – continued to level off, it added.
The Bank of Ireland Economic Pulse showed a reading of 88.3 in September. The index, which combines the results of the Consumer and Business Pulses, was 0.6 lower than last month but up 23.1 on a year ago.
The latest Consumer Pulse stood at 81 in September 2021, unchanged from August but 28.2 higher than a year ago.
Bank of Ireland said that with the domestic recovery continuing, households upgraded their assessment of the current economic situation again this month.
But they were more circumspect about the outlook for the economy and their own pockets though, possibly reflecting some wariness in the run up to Budget 2022 and the phasing out of pandemic-related supports.
Bank of Ireland also noted that buying sentiment was softer this month as rising prices squeezed purchasing power.
28% of consumers considered it a good time to buy big ticket items, down from almost a third during the summer.
The Business Pulse came in at 90.1 in September, down 0.7 on last month but up 21.8 on a year ago.
Sentiment was mixed across the sectors, with the Industry and Retail Pulses easing, the Services Pulse more or less flat on the month and the Construction Pulse up slightly.
All four indices remained above their pre-Covid level, Bank of Ireland noted.
On the costs front, two thirds of firms reported an increase in input costs excluding labour over the past three months, while almost half indicated that they expect to raise their selling prices in the months ahead.
Meanwhile, the Housing Pulse stood at 118.9, up 0.9 on last month’s reading and 56 higher than a year ago.
Bank of Ireland said more than three in five builders in the residential sector are currently struggling with material and equipment shortages and half are experiencing labour shortfalls, which suggests the demand-supply gap will not be closed any time soon.
Against this backdrop, 83% of households expect house prices to rise over the coming year and 75% – a series high – think rents will go up.
Dr Loretta O’Sullivan, group chief economist at Bank of Ireland, said the start of September saw restrictions on organised indoor and outdoor events eased but with the large re-opening gains in the rear-view mirror, economic sentiment continued to level off.
“The ‘return to the office’ is next on the agenda and, judging by this month’s survey findings, appears to have prompted some re-assessment of infrastructure needs,” Dr O’Sullivan said.
When businesses were asked to identify the priority area for investment, 37% said housing and 23% said telecommunications, she added.
Article Source – Consumer confidence steady, but business sentiment slips in September – RTE –
