Consumer sentiment rises after tariff pause but remains low compared to long-term trends
Irish consumer confidence picked up marginally this month as the threat of tariffs receded but the overall outlook remains 'gloomy' with confidence levels 'well below' long-term trends, the latest Consumer Sentiment Index shows.
This month's consumer sentiment index reading stood at 60.8 - up from 58.7 during April but significantly lower than the 74.9 figure seen as recently as January. The May survey reading is also some distance below the long-term survey average of 84.0.
The Credit Union Irish Consumer Sentiment Survey is based on a sample of 1,000 adults and is conducted by Core Research on behalf of the Irish League of Credit Unions. The analysis of the survey was written by economist Austin Hughes.
Mr Hughes said the increase between April and May 'is not altogether surprising' but the 'latest survey reading still suggests Irish consumers remain gloomy, with confidence remaining well below the level of a year ago and its long-term trend'.
He said the improvement in Irish consumer sentiment during May was driven by a 'limited easing in concerns about the outlook of the economy and jobs' which more than offset a 'slight weakening' in consumers' assessments of their own personal finances.
The survey shows the weakest elements of consumer confidence related to household finances likely reflecting a pick-up in grocery bills of late.
While the outlook for household finances over the next 12 months was effectively unchanged, Mr Hughes said this should be seen in the context of that being the weakest element of the April survey reading.
'Our sense is that renewed consumer concerns around their household finances owe much to a continuing step-up in grocery price inflation that has translated into ongoing and somewhat unexpected financial strains for significant numbers of consumers,' he said.
'The tone of the May sentiment survey suggests consumers are slightly less nervous about an apocalyptic collapse of the Irish economy than they were a month ago but there is still a strong sense that economic and financial conditions will be very challenging.'
The strongest improvement in consumer sentiment between April and May was seen in the outlook for jobs. 'This likely reflects a partial correction of the thinking that prompted a sharp weakening in sentiment in April,' Mr Hughes said.
'Comfortable' v 'clinging on'
In the survey, consumers were also asked how their household would deal with an unexpected financial emergency costing €1,000.
It showed 15% saying they couldn't deal with an unexpected financial outlay while 37% said they would rely on savings. Another 18% said they would use their current incomes to handle such a problem.
'Drawing together those who can meet an unexpected financial emergency through savings or from their current incomes, the 2025 survey might suggest that a little over half of Irish consumers might be described as 'comfortable' at present,' Mr Hughes said.
'At the other end of the financial spectrum, roughly one in four Irish consumers might be considered to be 'clinging on'. This grouping includes those who say they could not handle a financial emergency at present as well as those who would resort to borrowing from a lender other than a bank or credit union and those who would sell something,' he said.
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