A measure of business and consumer sentiment has shown a slight fall in July, as worries about the spread of the Delta variant of COVID-19 delayed the reopening of indoor hospitality.

The Bank of Ireland Economic Pulse recorded 89.3 for the month, down just 0.5 points from June, but up more than 27 points on the figure for July last year.

“While households were a touch more circumspect, business sentiment moved sideways, and with the recovery taking hold and an additional push on the vaccination front, the headline Economic Pulse remained above its pre-pandemic level,” the bank said.

The consumer part of the index showed a bigger drop – down 1.4 points from June to 74.8.

Consumers’ optimism about the labour market improved, however, with two-fifths of survey respondents indicating that it was easy to find or change jobs at the moment.

Staff shortages worry firms

The business component of the survey showed only a marginal drop, but 44% of firms indicated that they were planning to increase wages in the next 12 months – up from 29% in April. Bank of Ireland says this was driven in part by worries about staffing shortages as a recovery takes hold.

The housing component of the survey showed an increase of 3.3 points from June to 119.5 – the 15th monthly gain in a row.

Four in five households expect house price increases over the next 12 months, with almost half expecting them to go up by more than 5%.