April’s trade war threat spooked shoppers last month, but there are no indications yet that Irish people plan to rein in spending, a survey indicates.
The news comes as a Government report shows that consumers were key to recovery from Covid-19 lockdowns.
Global uncertainty sparked by US president Donald Trump‘s pledge early in the month to tariff imports led to consumer sentiment here plunging, according to the Irish League of Credit Unions (ILCU).
The organisation said on Tuesday that fears that a global trade war would lead to “markedly weaker economic conditions” at home left confidence at its weakest in two years.
“Irish consumers are now altogether more nervous and negative about the economic and financial environment than they were at the start of this year,” said the league in a statement.
Irish people are more nervous and negative about the economic and financial environment than at the start of the year, it added.
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Consumers in other countries share Irish shoppers’ nervousness as surveys worldwide last month found similar sentiments, the statement noted.
However, the survey carried out by the credit union league with Core Research, most people are not planning to rein in spending yet.
Irish League of Credit Unions chief executive David Malone noted that its sentiment survey highlighted that despite “current economic uncertainty, the majority of Irish consumers are now planning to spend on home improvements”.
Meanwhile, a Department of Finance report shows that a rebound in consumer spending aided the economy in recovering from Government-imposed Covid curbs.
Families accumulated cash as lockdowns forced them to stay indoors, cutting their opportunity to spend, states the report, The Irish Economy – five years on from the pandemic.
“Once restrictions were formally lifted, healthy balance sheets and the release of pent-up demand triggered a large and fairly rapid rebound in consumer spending,” it notes.
The report, due for release on Tuesday, states that this rebound in spending was key to the economy’s recovery from Government restraints.
However, Irish people ended up paying far more for goods and services after Covid than before, the civil servants in the department’s economics division acknowledge.
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Several shocks, including Russia’s invasion of Ukraine, which came as the Government rolled back the last of its restrictions, drove the most severe bout of inflation in decades.
Prices are now about 20 per cent higher than they were before the government locked the State down five years ago, the research indicates.
The department claims that businesses have created about 400,000 jobs here over the last five years, keeping unemployment at 5 per cent since 2022.
“Government supports helped maintain the link between employers and employees and prevented long-term ‘scarring’ effects on the labour market,” the department maintains.
