Irish consumers are more gloomy now about their economic prospects and those of the broader economy than at any point since 2023.
The public is growing more fearful that the latest war in the Middle East, involving Iran and Israel, will quickly lead to another cost-of-living crisis, the latest Credit Union Consumer Sentiment survey suggests.
The March poll paints a picture of a nervous Irish consumer whose thinking has become more negative in an environment that is more threatening.
It comes amid what is seen as an immediate risk of a large and lasting deterioration in economic and financial circumstances.
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Overall, the sentiment monitor fell to 56.7 in March, well down on the 65.2 level recorded in February.
The scale of the drop in the sentiment index between February and March is similar to that seen in the wake of the announcement of increased US tariffs on imports last April, suggesting it might be interpreted as a marked downgrade rather than a complete collapse in confidence.
The weakest element of the sentiment survey was consumers’ buying plans, indicating a notably more cautious and constrained approach to consumer spending in coming months.
In turn, this is likely to be a reflection of the combined impact of the increased risk to economic prospects and higher energy costs. Both these factors weighed heavily on Irish consumer confidence in March.
Economist Austin Hughes, who wrote the report, said how sharp and sustained the pullback in sentiment and spending proved to be would depend significantly on how large and lasting the fallout from war in the Middle East was and the extent to which Government support measures cushioned the blow of higher living costs.
“We would interpret the March sentiment survey reading as suggesting that Irish consumers see recent developments weighing materially more on already-challenging circumstances rather than representing a complete sea-change in the circumstances they face,” he said.
All the elements of the March reading of the Credit Union Consumer Sentiment Survey, done in partnership with Core Research, were lower in March than in February. However, the degree of deterioration varied widely.
There was a marked worsening in Irish consumers’ thinking on the general economic outlook, with this element of the survey dropping to its lowest level since November 2022.
There was a much poorer outlook for household finances, with all three elements of the sentiment survey related to household spending power and plans declining between February and March.
With motor fuel and heating oil prices rising rapidly through the March survey period and with global developments suggesting the prospect of substantial increases in electricity and gas prices Irish consumers appear to be bracing themselves for a major hit to their spending power as 2026 progresses.
“If military action ends soon and energy markets return to their February pricing, Irish consumer sentiment and spending would move back quickly to their early 2026 trajectory,” Hughes said.
However, if there were large and lasting disruptions to energy supplies and a corresponding premium in energy pricing then “there may be more significant downside risk to Irish consumer sentiment and spending”.
