Consumer sentiment 'steady but subdued' amid living cost pressures and uncertainty 

Price hikes and living pressures continuing to weigh on consumer thinking

The consumer sentiment index stood at 74.8 this month, effectively unchanged from the January reading of 74.9.

Consumer sentiment remained steady but subdued in February as a threatening economic outlook and cost of living pressures weight on consumer thinking, the latest Credit Union Consumer Sentiment Index shows.

In the index’s analysis, economist Austin Hughes noted a spate of price hike announcements through the survey period, suggesting pressure on household finances remains an issue.

"Given growing concerns around the threat posed by possible changes in US policymaking as well as a tendency towards weakness in February readings, the steady Irish confidence data should probably be seen as encouraging as well as somewhat surprising," said Mr Hughes.

"In part, the resilience of Irish consumer sentiment in February reflects the relatively downbeat mood already prevailing, which means many Irish consumers have already discounted fairly difficult economic and financial conditions in the year ahead."

The consumer sentiment index stood at 74.8 this month, effectively unchanged from the January reading of 74.9. However, it is still some distance below the long-term average of 84.2.

"Irish consumer sentiment has been largely unchanged through the five months since October 2024 when the boost from easing inflation and improved fiscal supports was countered by the darkening shadow of an altogether more threatening policy stance from an incoming US administration," Mr Hughes noted.

According to the survey conducted for the index, three of five of the main elements posted month-on-month declines in February with the other two posting increases.

"Perhaps surprisingly, consumers' views of the twelve-month outlook for the Irish economy weakened only fractionally in February while thinking on jobs improved somewhat," the economist added.

"Consumer thinking on the economic outlook and on jobs is already quite negative and has seen very little improvement over the past year in spite of the ongoing strength of the Irish economy and the particular buoyancy of the jobs market."

Addressing ongoing threats of a tariff war between Europe and the US, the index said Irish consumers were "very conscious" of the risks posed by the current US administration, but the precise nature, extent and timing of any fallout for the Irish economy remains "mired in uncertainty."

The survey period also saw a large number of price increases and announcements of future price increases, ranging from fuel costs through health insurance, broadband, tv and mobile phone charges to postal costs and bin charges. 

In addition, the survey period also saw the Taoiseach state that there were no plans to continue energy credits or cost-of-living supports in this year’s Budget.

"In circumstances where cost-of-living concerns remain a major issue of many consumers, it is not entirely surprising that the February survey saw consumers mark down their assessment of their household finances and the outlook for the year ahead in particular," Mr Hughes added.