Energy price hikes dent profit expectations for Dublin companies

“Dramatic” increases in energy costs took a significant chunk out of business confidence in the capital between April and June with companies bracing for higher operating costs and reduced profits over the summer months.

However, almost two-thirds of respondents to a survey by Dublin Chamber said they had not implemented any energy-saving practices in the three months to the end of June.

Based on a sample of 150 businesses, the chamber’s latest business outlook survey revealed that companies were decidedly more pessimistic about their cost and profit expectations in the second quarter of the year compared with the first.

More than half of respondents said they expected revenues to rise over summer but this represented a drop of more than 10 percentage points from the first quarter of the year.

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At the same time, some 83 per cent of chamber members surveyed said they expected their operating costs to increase between July and September. Consequently, the number of respondents who expected their profits to rise over the same period declined to 31 per cent, “sharply down” from almost half in the first quarter, Dublin Chamber said.

Although businesses highlighted challenges around recruitment, supply chains and cyber security, rising energy prices are accentuating current cost pressures for business in the capital, Dublin Chamber said.

Nearly 60 per cent of respondents said their energy bills had increased by up to 20 per cent over the past 12 months while a quarter said their bills had gone up by 20-40 per cent over the same period.

Despite this, only 38 per cent of companies said they had implemented any energy-saving measures between April and June.

“When asked about this, the most common answer was that ‘all possible energy-saving measures have already been implemented’,” said Aebhric McGibney, director of public and international affairs at Dublin Chamber. “Lack of time and knowledge were the next most frequent responses.”

Ms McGibney said that the knowledge gap was “worrying” and Government schemes and grants should be simplified “as a critical step toward a sustainable economy”.

In its pre-budget submission, published last week, Dublin Chamber called for all exchequer revenues generated through carbon tax to be ring-fenced for investment in green infrastructure, public transport and funds that will support communities and businesses to transition to green transport and heating alternatives.