Companies and consumers are still upbeat about future economic prospects, despite the spread of the Delta Covid variant and a delay to the reopening of indoor hospitality.

A Bank of Ireland survey published today shows economic sentiment in July was slightly down on the previous month, but was still way up on pre-pandemic levels.

Home buyers were particularly buoyant, with confidence in the market close to an all-time high.

However, firms have expressed concerns over a shortage of material, equipment, space and staff, which could put pressure on prices and pay.

“The July findings suggest a mood of cautious optimism as households, firms and the economy navigate their way back to some semblance of normality,” said Bank of Ireland’s group chief economist, Loretta O’Sullivan.

“Pandemic–related disruption is not over yet though, with various bottlenecks becoming apparent and impacting a range of sectors.”

The Bank of Ireland Economic Pulse – a combination of consumer and business sentiment surveys – came in at 89.3 in July, 0.5 lower than last month but up 27.4 on a year ago.

Any measure over the consumer pulse came in at 74.8 in July, down 1.4 on last month (but still 19.3 ahead of July 2020), while the business pulse was 92.9, 0.2 points lower than June but 29.5 up on the same month a year ago.

The housing index stood at 119.5 in July, up 3.3 on last month and 69.1 higher than a year ago.

Concerns about the new strain of the coronavirus tempered expectations a bit, but the job market is looking healthier as the economy reopens.

Two-fifths of consumers surveyed said they are finding it easy to change jobs, up from 18pc at the beginning of the year, while two-in-five workers expect a pay rise within the next year.

Those pay expectations were borne out by the employer survey, with 44pc of firms planning on increasing basic wages in the next 12 months, up from 29pc in April, with around 25pc of firms expressing concerns about staff shortages. Over a quarter of firms also say they are struggling with material, equipment and space shortages.

Industry was the most upbeat sector, with sentiment increasing in July, while services was flat and retail and construction sentiment even dipped a little.

Still, three-in-five firms say they intend to expand their business in the next three years.

The housing index, meanwhile, registered its 15th consecutive gain and is just below an all-time high.

Four-in-five households now believe house price increases are on the cards in the next year, with 45pc expecting them to go up by more than 5pc. However, around 70pc of people still say it’s cheaper to buy than rent in their area.

In regional terms, sentiment was down a little in Dublin in July, up in the rest of Leinster and Munster and flat in Connacht/Ulster.

The Economic Pulse surveys 1,000 households and 1,350 businesses each month, and is conducted by Ipsos MRBI on behalf of Bank of Ireland.