Consumer and business confidence falls amid rising Covid numbers

Shoppers in Cork city. 'The rise in virus cases at home and overseas has rattled nerves, while the rebooting of the economy has hit some speed bumps.' Picture: Damian Coleman

Consumer and business confidence in Ireland dipped following concerns about Covid-19 spikes and some setbacks in re-opening the economy.

Following three consecutive monthly increases in confidence, the Bank of Ireland Economic Pulse stood at 59.3 in August. This was down 2.5 on last month and 19.8 lower than a year ago.

Loretta O’Sullivan, Chief Economist for Bank of Ireland said the dip in the Economic Pulse is not surprising given the unsettled backdrop lately. 

"The rise in virus cases at home and overseas has rattled nerves, while the rebooting of the economy has hit some speed bumps with the re-opening of ‘wet’ pubs pushed out, confusion over the travel Green List and the imposition of local lockdowns in three counties," she said.

"There is a growing sense emerging nationally that things may be somewhat ‘stop-start’ over the coming months. This emphasises the importance of clear communication in the direction of public health and economic policy, which should serve to lessen the uncertainty facing households and firms.”

The standalone Consumer Pulse shows households were more subdued about their current financial situation this month. Buying sentiment also softened in August, with 21% considering it a good time to purchase big-ticket items like furniture and electrical goods compared with 26% in July.

While the consumer and business pulses were down, the three-month rolling Bank of Ireland Regional Pulse showed increases across four regional areas. The indices are calculated on a three-month moving average basis and show that sentiment was up across the board in the June to August period compared with the May to July period.

The Dublin Pulse jumped 7.4 points on the previous survey while the rest of Leinster increased by 3.1 points. However, the standalone monthly reading for the Rest of Leinster shows a sizeable drop in confidence in August following the re-imposition of restrictions in counties Kildare, Laois, and Offaly.

Munster recorded a three-point increase in confidence while Connaught/Ulster increased 6.3 points.