Recovering consumer sentiment in January helped by New Year optimism

Credit Union Consumer Sentiment Survey showed an index reading of 64.7 for January, an improvement on December but markedly lower than a year ago

Irish consumers may be detecting at least tentative signs of a slowdown in inflation and living costs, the survey said. Photograph: Sasko Lazarov/ © Rolling News.ie

Consumer sentiment recovered in January, with the Christmas period usually leading to a seasonal switch-off from economic news.

The latest Credit Union Consumer Sentiment Survey showed an index reading of 64.7 for January, an improvement on the 61.2 figure recorded in December but markedly lower than a reading of 74.9 one year ago.

The current survey reading is still at a relatively weak level historically, implying personal finances remain under strain for many households.

This was also likely underpinned by some New Year optimism that the turbulence of the past twelve months may not be repeated in 2026, economist Austin Hughes said.

However, Mr Hughes said the February sentiment reading tends to signal a renewed focus on challenges for household finances and the broader economic environment. Frequently, this leads to a correction that brings the index lower.

The monthly uptick in consumer sentiment in January was broadly based and largely underpinned by consumers' assessment of their personal financial circumstances.

Irish consumers may be detecting at least tentative signs of a slowdown in inflation and living costs, the survey said. The still downbeat tone of sentiment suggests consumers view this as some degree of easing in current pressures rather than signalling any clear gains in household spending power, Mr Hughes said. 

In the same vein, largely unchanged buying plans in January point towards a cautious and concerned but not completely negative Irish consumer in early 2026.

Mr Hughes said he would not suggest that the January 2026 reading clearly points towards improving sentiment through the year ahead. 

"That said, against a backdrop of growing geopolitical uncertainty as the survey period progressed, we would draw some encouragement from an improvement that brought the Irish consumer sentiment index to its highest level in nine months, even if we think this gain might prove temporary or purely ‘seasonal’," Mr Hughes added.

The survey also noted female consumers were more negative and had become more pessimistic about the outlook for their household finances in the year ahead, a development that could reflect the failure to continue temporary cost-of-living support measures in the most recent Budget.

Possibly as a result, female consumers are both more negative than males and have also become more pessimistic in relation to making major purchases in the past twelve months.

There was also a sharper drop in Irish consumer sentiment among females in the past twelve months, which was particularly evident on the outlook for jobs.

The survey also noted that consumer sentiment continues to be higher among those aged under 45 than among those aged over 45.

While this result may be at odds with many prevalent narratives, Mr Hughes said it is likely due to the nature of the sentiment study that focuses on perceived changes in economic and financial conditions for Irish consumers rather than either their current level of income or wealth.

"While the improvement in Irish consumer sentiment in January may be modest and potentially temporary, it is nonetheless encouraging," said David Malone, CEO of the Irish League of Credit Unions.

"In particular, the uptick in consumers’ assessments of their own personal financial circumstances is notable. However, it remains unclear whether this reflects short-term New Year optimism or the beginning of a more sustained improvement".