The cooling-off of tariff rhetoric in May slightly improved shoppers’ confidence, though it remains well below the long-term level, a new survey has indicated.
Amid the cost-of-living crisis, 15 per cent of Irish consumers say they would not be able to cope with an emergency cost of €1,000, according to the Irish League of Credit Unions (ILCU).
“With some rollback of the scale and timing of increased tariffs in recent weeks and a sequence of largely reassuring domestic economic releases, a very slight pickup in Irish consumer sentiment in May is not altogether surprising,” it said.
Despite the bump in confidence, Irish consumers still “remain gloomy”, the survey found. Although at an index reading of 60.8 in May – an improvement on 58.7 in April – the level is significantly lower than the long-term average of 84.0.
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The growth in the overall consumer sentiment figure was driven by a “limited easing” in the subindexes measuring consumers’ outlook for the economy and employment. This positive step outweighed a weakening in the index for consumers’ perceptions of their personal finances.
The survey, which was conducted in partnership with Core Research, found that Irish consumers still expect a contraction in the general and job economies, but sentiment had recovered slightly from its recent low last month.
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Irish consumers downgraded their perception of their own finances, falling from 72.3 for the past year and to 71.8 for the year ahead.
“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,” the Irish survey noted.
The number of those who would be able to use savings to deal with an unexpected financial emergency costing €1,000 has decreased from 39 per cent to 37 per cent, down from the 2023 peak of 44 per cent.
In broader financial terms, the survey said: “It remains the case that a significant 15 per cent of Irish consumers say they would be unable to cope with a financial emergency costing €1,000 in 2025.”
The survey concluded that just over half of consumers in Ireland are “comfortable” financially at present, with a further one in four “clinging on”, and would respond to such an emergency by borrowing or selling something.
Between those two consumers sections is a share described as “coping” financially, and could respond to an unexpected financial burden by borrowing from family or friends, or from a bank or credit union, or by using a credit card.
David Malone, chief executive of the Irish League of Credit Unions, said: “The special question in the May credit union consumer sentiment survey highlights the wide range of conditions facing Irish consumers at present. While many are reasonably comfortable at present and planning a better future, others would face substantial problems in the event of an unexpected expense or bill.”
