Consumer confidence falls to all-time low with a third of households just managing to make ends meet

Sarah Collins, September 26, 2022

A third of people were just managing to make ends meet this month, according to a Bank of Ireland sentiment survey.

The figure rose to 53pc for lower-income households, Bank of Ireland’s economic pulse survey found, and dropped to 16pc for those at the top end.

Consumer confidence fell to an all-time low as households faced rising energy bills and mortgage repayments, with people more gloomy about their overall personal finances, as well as the economy and job prospects.

It comes as Flogas Energy announced its third price rise this year – the eighth company to announce a hike in electricity and gas prices recently.

And grocery price inflation hit 11pc in the three months to September, with the cost of back-to-school essentials such as bread, ham, cheese, yoghurt, cereal and milk rising by 19.5pc, according to research firm Kantar.

Bank of Ireland’s consumer pulse survey came in at 42.1 in September, down 6.3 on August and 38.9 lower than a year ago.

Companies were also more downbeat as economic uncertainty grew, with two-thirds saying it is difficult to predict the future development of their business situation.

The business pulse was 77.7 in September 2022, down 0.7 on last month and 12.3 lower than a year ago.

Housing was the most important area for investment for 42pc of firms, followed by transport (23pc of firms).

Almost two-thirds of respondents (65pc) believe house prices will increase over the coming year, a three percentage point fall on last month.

Basic infrastructure, including energy, water and waste, was a priority for 19pc of firms – a category that usually comes bottom of the list – as concerns about disruptions to gas flows from Russia grew.

And 15pc of firms put telecommunications as the most important area for investment.

The economic pulse survey – which combines consumer and business sentiment – came in at 70.6 in September, down 1.8 on last month and 17.6 lower than a year ago.

“Economic sentiment was down this month amid an intensification of energy woes,” said Bank of Ireland’s group chief economist Dr Loretta O’Sullivan.

“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 re-assessment of infrastructure needs.”

The industry (up five points to 86) and retail (up 8.5 points to 73.7) sectors were the most upbeat sectors, while services fell 4.3 points to 77.4 and construction was down 1.4 points to 74.6.

The housing pulse survey came in at 99.8 in September, down 1.6 on last month and 19.1 lower than a year ago.

Households and firms around the country were more downbeat over the last three months, with sentiment lowest in Connacht and Ulster, at 67.5, although Munster saw the largest quarterly fall, dropping 4.7 points to 68.4. County-wise, people and firms in Dublin were the most upbeat.