Irish consumer sentiment slumped to a nine-month low in March as the uncertain impact of a trade war between Europe and the United States played on the minds of consumers.
The latest Credit Union sponsored barometer fell to 67.5 – significantly lower than the 74.8 reading for February – suggesting “a clear deterioration in consumers’ assessment of their economic and financial environment,” the report said.
“A sense that the Irish economy could be particularly exposed to threatened tariffs on trade prompted the largest monthly pullback in Irish consumer sentiment in two and a half years in March,” it said.
There have been several reports and warnings in recent weeks about Ireland’s oversized exposure to US tariffs and the potential threat to the economy if Washington specifically targets the State’s Big Pharma sector.
On Wednesday, US president Donald Trump announced a 25 per cent tariff on all foreign-made cars and trucks while signalling Irish-made pharmaceuticals would also be a target.
US consumer sentiment dropped to its weakest level since November 2022 in March on the back of fears that increased tariffs would push the cost-of-living sharply higher.
Euro area consumer confidence also fell but not by as much. “It should also be recognised that trade with the US is altogether less important for most Euro area economies than it is for Ireland,” the Irish survey noted.
“As a result, it is not surprising that the fall in Euro area consumer sentiment in March was not as pronounced as it was in either the US or Ireland,” it said.
In addition to the fallout from tariffs, Irish consumer sentiment was also hit by a series of high-profile price increase announcements during the survey period, which the report said, “added to gloom by suggesting continuing pressures on household finances for many consumers”.
Consumers have been warned to expect price hikes in health insurance, energy, broadband and mobile phones from next month.
David Malone, chief executive of the Irish League of Credit Unions, said: “It is not surprising that the March sentiment survey paints a picture of a much more nervous Irish consumer as they face into the uncertain impact a threatened trade war could have on the economy and their own personal financial circumstances.”
