Consumer sentiment falls to nine-month low amid concerns over tariffs and cost of living
During March, the consumer sentiment index showed a reading of 67.5 — significantly lower than the 74.8 reading in February.
Irish consumer sentiment has fallen to a nine-month low this month as the prospect of a trade war with the US being cited a major concern, along with the potential for price increases, the latest Credit Union Irish Consumer Sentiment Index has found.
During March, the consumer sentiment index showed a reading of 67.5 — significantly lower than the 74.8 reading in February — suggesting a “clear deterioration in consumers' assessment of their economic and financial environment”.
The reading is also well below the survey’s long-term average of 84.2, and is the lowest reading since May last year, when a 65.7 was recorded.
The 7.4-point month-on-month drop in the sentiment index in March is the largest since September 2022.
As part of the index, a survey was conducted by Core Research on 1,000 Irish adults on behalf of the Irish League of Credit Unions. The analysis of the survey results was written by economist Austin Hughes.
According to the survey, fear is the key driver of the drop-off rather than increased financial pressure, as consumers downgrade their outlook for the economy and household finances.
Faced with the growing of a trade war, Mr Hughes said it was “not a surprise” Irish consumers “materially marked down their views on the outlook for the Irish economy this month”.
The index saw a marked reduction in consumer sentiment across all areas — including current and future financial situation, the economic outlook, as well as the outlook for unemployment.
However, while sentiment among Irish consumers may be down, US consumers are even more nervous the increased tariffs would push the cost of living sharply higher for them, prompting an even larger monthly fall in US consumer sentiment.
The preliminary reading of US consumer sentiment — compiled by the University of Michigan — was somewhat larger than that seen in the Irish survey, from a 70.5 reading in February, to 57.9 this month. This left US consumer sentiment at its lowest level since November 2022.
US president Donald Trump is expected to announce a number of tariffs against the EU on April 2 next week. The EU is expected to retaliate against the US in the middle of April.
On Wednesday night, Mr Trump said his administration would be imposing a tariff on pharmaceuticals entering the US, calling out Ireland in particular. Pharmaceuticals is one of Ireland's main exports, with the US being the primary market.
Mr Trump also announced a 25% tariff on all cars imported into the US.
David Malone, chief executive of the Irish League of Credit Unions, said it was “not surprising” the March sentiment showed a “much more nervous Irish consumer” as they face the uncertain impact a threatened trade war “could have on the economy and their own personal financial circumstances”.
The survey also included questions about where Irish consumers get their information on the economy and financial conditions.
It found 58% use TV or radio as their main or an important source of information, with 42% saying newspapers, and 35% saying social media.
“Perhaps reflecting the complexities of the current economic picture, Irish consumers appear willing to draw on multiple sources,” Austin Hughes said.
