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Irish Independent
25-07-2025
- Business
- Irish Independent
Shoppers reeling from ‘sticker-price shock' as inflation eats away at consumer confidence
Rising living costs are the most pressing issue for households and have put a dent in consumer confidence, the Credit Union Consumer Sentiment Index for this month indicates. Almost four in 10 people said the most pressing issue facing them is the cost of living. One in five said the shortage of housing was a major issue for them, and 8pc cited tariffs and trade threats as a worry. People under the age of 55, who typically have mortgages and high childcare costs, are more worried about the cost of living than older consumers. Food-price inflation has reached its fastest pace in a year-and-a-half. Economist Austin Hughes, who oversees the compiling of the index, said the annualised rate of food-price inflation is 7.6pc. 'Although few consumers will consciously make annualised calculations, these results likely chime with some experience of 'sticker-price shock' when shopping, resulting in a clearly faster drain of spending power of late,' he said. The latest figures show beef prices are up 22pc in the past year, butter is up 19pc, milk 12pc and chocolate 17.5pc. Mr Hughes said those figures show grocery bills are rising at a faster pace than the overall inflation figure suggests. The threat of tariffs has increased nervousness about the country's economic prospects 'Concerns around living costs were likely amplified by a series of government comments indicating that the upcoming budget would not contain a cost-of-living package,' he said. 'The sentiment survey suggests that a fiscal stance that ignores current pressures on household finances is likely to prove far less sustainable than one that implements fair and focused measures to support living standards.' The threat of tariffs on EU exports to the US has increased nervousness about the country's economic prospects. Mr Hughes said worries about grocery costs were the main reason for the drop in consumer confidence. 'Accelerating food prices and indications that the upcoming budget wouldn't contain offsetting measures are likely key factors,' he said. After a slight improvement through May and June, consumer confidence has slipped back to the level reported in April, when the threat of a tariff-driven trade war prompted a sharp deterioration. This month's Credit Union Consumer Sentiment Survey, in partnership with Core Research, has an index reading of 59.1, down from the 62.5 reported for May. The decline in recent weeks brings Irish consumer sentiment to a two-year low. The parts of the index that relate to household finances and spending both showed month-on-month declines, Mr Hughes said.
Irish Examiner
24-07-2025
- Business
- Irish Examiner
Consumer sentiment slips in July amid concern over cost pressures and tariff threats, survey shows
Irish consumer sentiment has slipped backwards during July, amid renewed concerns over cost pressures and the threat of higher tariffs being implemented by the US, the latest Credit Union Consumer Sentiment Survey shows. The survey showed after a slight improvement across May and June, Irish consumer confidence slipped back this month towards the level seen in April, when tariffs announcement by US president Donald Trump prompted a deterioration. During July, the consumer sentiment index recorded a reading of 59.1, down from the 62.5 figure reported for June. The reading of 58.7 in April represented a two-year low. The July reading is well below the 70.5 recorded during the same month last year, and the long term average of 83.9. The Credit Union Irish Consumer Sentiment Survey is a monthly survey of a nationally representative sample of 1,000 adults conducted by Core Research. The analysis for the sentiment was written by economist Austin Hughes. Earlier this month, Mr Trump threatened to impose 30% tariffs on imports from the EU from August 1 if a deal is not reached. This is higher than the 20% he initially proposed on April 2, before he backtracked and lowered it to 10%. On Thursday morning, EU member states voted to approve counter-tariffs on €93bn on US goods in case a deal is not reached, potentially increasing prices here in Ireland. 'At current levels, the tone of consumer sentiment on the Irish economy is altogether more negative than that implicit in a range of recent forecasts for the Irish economy,' Mr Hughes said. 'While this doesn't mean Irish consumers envisage an imminent economic collapse, it does suggest very elevated fear and uncertainty, coupled with a strong sense that economic conditions could deteriorate markedly through the next 12 months.' 'It could also suggest that many consumers don't feel their own financial circumstances are as robust as the economy as a whole.'
Irish Independent
30-06-2025
- Business
- Irish Independent
Large numbers of consumers confused about impact of inflation on purchasing power
And many consumers have a limited understanding of how the tax on savings accounts works. That is according to a new survey that lays bare the extent of financial illiteracy in this country. The PTSB 'Reflecting Ireland' research revealed that nine out of 10 of respondents think they have average or high financial literacy. But specific questions asked as part of the survey contradict this view that people understand personal financial matters. The research found that four out of 10 respondents could not correctly answer a Junior Cert level business sample exam question on the impact of inflation on household purchasing power. They were asked if high inflation is bad for their purchasing power – the quantity of products and services available for purchase with a certain amount of money. The research found that only 58pc of respondents identified that high inflation is bad for their purchasing power. Some 27pc got it wrong, answering that high inflation was not bad for their purchasing power. And 10pc incorrectly said their purchasing power would remain the same in a period of high inflation. Some 5pc said high inflation makes their personal finances more stable. ADVERTISEMENT Consumers were also asked about the impact of DIRT (Deposit Interest Retention Tax) on their savings. Only of respondents were able to correctly calculate the total amount of savings they would earn after DIRT is applied. PTSB said these findings were consistent with other aspects of the survey, which also asked respondents to assess for themselves their ability to understand financial terms, concepts and products. Just under 10pc of respondents said their financial literacy is low. This cohort reported feeling down about their finances and feeling uncomfortable talking about money to family and friends. Some 40pc of respondents cited the belief that feelings of embarrassment can be a key barrier to improving financial understanding. The survey, conducted by Core Research, also found that only 53pc of people are comfortable talking to a friend or family member about money. PTSB chief sustainability and corporate affairs officer Leontia Fannin said the results of the survey show that more needs to be done to raise financial literacy levels. 'These results highlight that support is needed to educate people on the importance of financial literacy in order to increase financial resilience, inclusion, and protection against financial scams,' she said. Almost half of respondents felt technology has helped them to better understand fees and charges, financial products and services available, and their personal spending habits. This increases to an average of 57pc for those aged between 18 and 24. Those over-55 are the least likely group to have used technology to help understand their finances better. A drop in consumer sentiment towards the economy was also recorded in the replies. More than half believe the country is on the wrong track, a number which has grown significantly since the start of the year. Some 42pc say their financial situation has deteriorated over the past 12 months. And a third say they expect to be worse off in a year's time, and a similar proportion say they will be no better off.
Irish Times
26-06-2025
- Business
- Irish Times
Irish consumer confidence improves as public adapt to global instability
Irish consumer sentiment improved in June as worries around tariffs cooled and interest rates fell, but concerns over trade wars, escalating military conflicts and cost of living pressure kept the gains marginal. The latest Credit Union barometer saw its first back-to-back improvement since July last year as the consumer sentiment index rose from 60.8 to 62.5 from May to June. The report said the large gap since the most recent back-to-back gain emphasises 'how uncertain and threatening the circumstances facing Irish consumers have been of late, notwithstanding the continued solid performance of the economy through this time.' The level of consumer confidence, despite the slight increase in the past month, remains well below the reading in June 2024 of 70.5, and well below the long-term survey average of 84. READ MORE The survey, which was conducted in partnership with Core Research, was compiled before the 'heightened geopolitical uncertainty related to the escalation in military conflict in the Middle East', the report said. Within this context, the rise in Irish consumer sentiment in June was mirrored in gains in similar measures for the US and UK. In Ireland, the consumers' assessment of the current economic conditions brightened, and 12-month expectations were resurgent. Falling from a height of 90.1, consumers' evaluations of their personal financial situations in 12 months' time has recovered somewhat from a trough in the low 70s in April and May, in reaction to the announcement of US import tariffs. People's general economic outlook has brightened also, but consumers have not yet regained their pre-tariff confidence. The report indicated that Irish consumers have become used to the economic instability in the system. 'As uncertainty and a threatening geopolitical landscape are now almost permanent features of the Irish economic landscape, consumers have already adapted their behaviour to these developments in recent years,' the report said. 'So, the threat of a trade war or even the increased threat of military conflict are not altogether radical changes in the landscape.' Irish consumers are generally in a slightly stronger position in holiday spending power than a year ago, but an increased number of consumers are planning to spend more on holidays this year – 26 per cent – than it stood last year (23 per cent). At the same time, the level of consumers unable to afford a holiday was little changed at 22 per cent this year. The rate of people planning to spend less on holidays increased from 15 per cent to 17 per cent. The barometer said the results 'highlight wide variations in financial circumstances across Irish consumers' and indicated a three-tiered financial situation among consumers. The chief executive of the Irish League of Credit Unions David Malone, said: 'The improvement in consumer sentiment in June, while marginal, is encouraging in that it hints that Irish consumers are adapting to a very challenging environment.'
Irish Independent
26-06-2025
- Business
- Irish Independent
Nearly one in four can't afford a holiday this year, survey finds
Close to one in four said they will not be able to afford a holiday this year, according to the June Credit Union Consumer Sentiment Index. Those most likely to say they cannot afford a holiday included women, those aged 45 to 54, and those struggling to make ends meet. This is despite the fact that the cost of travelling abroad is lower than last year. However, domestic restaurant and hotel prices are higher. The survey, carried out in partnership with Core Research, indicates that the vast majority of consumers do not intend to spend more on their holidays this year. One in four plan to spend more on their holiday than they did a year ago Economist Austin Hughes, who oversees the compiling of the consumer sentiment index, said this suggests discretionary spending power remains limited for most Irish households. The survey showed roughly one in four consumers plan to spend more on their holiday than they did a year ago. Broadly similar numbers plan to spend the same amount. But 22pc said they are unable to afford to go on holidays this year. 'So, these results are consistent with a range of other responses to special questions in previous sentiment surveys in that they highlight wide variations in financial circumstances that might be summarised as suggesting a three-tier breakdown in the financial health of Irish households that ranges from fit to feeble,' Mr Hughes said. ADVERTISEMENT He added that the results are marginally more positive than a year ago, as the share of consumers spending the same or more is fractionally up. The share of those unable to afford a holiday is marginally down. However, there is also a small increase in the share of consumers who say they will spend less on holiday this year, Mr Hughes said. The demographic breakdown suggests consumers in Dublin, those on higher incomes and those aged 25 to 34, are more likely to plan to spend more on holidays this year than others. Men are more also likely to plan to spend more than women. Overall, consumer sentiment improved marginally in June. This was due to tariff threats easing slightly, oil prices and interest rates falling, and the economy continuing to post strong growth in activity and employment. The survey for June has an index reading of 62.5, up slightly on the 60.8 figure for May.
