Irish economic sentiment has declined further in September, with the prospect of higher energy bills weakening consumer confidence and businesses flagging concerns about basic infrastructure, the latest Bank of Ireland index shows.
Anxiety over electricity and gas bills is weighing on households’ mood, the bank’s Economic Pulse found, while security of supply as well as cost concerns saw basic infrastructure — energy, water and waste — move up the priority list for public investment among businesses.
Households have become more apprehensive about both the economy and job prospects, and with energy bills for all and mortgage repayments for some on the rise, consumers grew gloomier about their personal finances, too.
One in three is just managing to make ends meet according to September’s survey, though this varies across the income distribution. The figure for households at the bottom end was 53 per cent, compared with 16 per cent for those at the top end.
The index, which combines the results of consumer and business sentiment, came in at a reading of 70.6 for this month, down 1.8 on the August reading and 17.6 lower than a year ago.
Loretta O’Sullivan, group chief economist for Bank of Ireland, noted that energy matters were to the fore amid disruption to gas flows from Russia to Europe and the announcement of further price increases by energy providers in the Irish market.
“Economic sentiment was down this month amid an intensification of energy woes,” she said. “With households facing the prospect of even higher gas and electricity bills over the coming months, consumer confidence sank to an all-time low in September. The unsettled environment also tempered business sentiment, while concerns about the ability of Ireland and other European countries to keep the lights on this winter appear to have prompted some reassessment of infrastructure needs.”
Energy, water and waste overtook telecommunications as a priority area for investment identified by businesses, although housing remained the top answer, ahead of transport.