Tariff war worries cause Irish consumer sentiment to slide in March

Posted on: 28 Mar 2025

• Irish consumer sentiment tumbles to 9-month low in March
• Fear rather than further financial pressures the key driver
• Consumers make broadly based downgrade of outlook for economy and household finances
• Trade war threats seen as main driver with price increase announcements adding to worries
• Irish confidence drop smaller than that in US but bigger than elsewhere in Europe as inflation fears rattle US consumers
• Special question examines where Irish consumers get their information on economic and financial developments
  • 58% use TV/Radio as main or important source
  • 42% use newspapers as main or important source
  • 41% use family and friends as main or important source
  • 35% use social media as main or important source
  • Consumers using TV/Radio as main source tend to have more negative views on economy and household finances at present 

Speaking on the release of the March sentiment survey data and analysis, David Malone, CEO of the Irish League of Credit Unions noted; ‘'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. In changing and challenging times, Irish consumers can continue to rely on the support of their local credit union to help them build a better future.'   

Summary

Irish consumer confidence weakened to its lowest level in nine months in March as fears of the impact on the Irish economy of a tariff war between the US and the EU prompted a sharp downgrade in both ‘macro’ and ‘micro’ elements of the Credit Union Consumer Sentiment Survey.

In addition to the fallout for household finances from weaker employment and a tighter fiscal position as a result of a more threatening economic outlook, a series of high-profile price increase announcements during the survey period also suggested continuing pressures on household finances for many consumers.  

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.

However, American consumers were even more nervous that increased tariffs would push the cost-of-living sharply higher for them, prompting an even larger monthly fall in US consumer sentiment than seen in the Irish survey and bringing US consumer sentiment to its weakest level since November 2022. 
 

Section I; March sentiment reading suggests Irish consumers scared and scarred as threatened tariff war prompts downgrade to outlook for economy and household finances

As table 1 above indicates, the Credit Union Consumer Sentiment Survey (in partnership with Core Research) shows an index reading of 67.5 in March, significantly lower than the 74.8 reading for February, and suggesting a clear deterioration in consumers assessment of their economic and financial environment. 
Some context for the March 2025 sentiment reading may be helpful.

• At 67.5, the March 2025 sentiment reading is the lowest since the May 2024 reading of 65.7.

• Moreover, the 7.4-point month-on-month drop in the sentiment index in March is the largest since September 2022 when fears of a winter of sharply more expensive fuel costs prompted an 11.3 point drop in Irish consumer sentiment.

• While the March 2025 sentiment survey indicates that Irish consumers clearly fear a poorer outlook, the change in thinking this month is not nearly as catastrophic as the record 34.8 drop seen in April 2020 when the first wave of Covid-19 prompted a shutdown of the Irish economy and most of its global counterparts.

• As the diagram below illustrates, the March 2025 Irish consumer sentiment reading at 67.5 is well below the long-term survey average of 84.2 but it is marginally above the 66.3 average for the past five years when a sequence of shocks from Covid to cost-of-living pressures took a heavy toll on the conditions of the typical Irish consumer.  

Sentiment slides on both sides of the Atlantic as tariff threats increase

The drop in consumer sentiment in March was not unique to Ireland, as the diagram below illustrates.
Indeed, the fall in the preliminary reading of US consumer sentiment (compiled by the University of Michigan) was somewhat larger than that seen in the Irish survey, from a 70.5 reading in February to 57.9 this month. This left US consumer sentiment at its lowest level since November 2022.

The authors of the US report cite a broadly based deterioration in consumer expectations and notably increased uncertainty about the economy. However, the details of the report emphasise a further sharp increase in the outlook for inflation with tariffs seen further aggravating already elevated living costs.

US consumers fears of persistent price pressures were seen in a jump in their estimates of future inflation. The March sentiment survey saw one-year inflation expectations jump from 4.3% a month ago to 4.9%, the highest since November 2022. More ominously, American consumers are becoming notably more pessimistic that price pressures can be contained, long-run expectations for inflation jumped from 3.3% last month to 3.9% in March, the highest since February 1993. 

The ‘flash’ estimate of Euro Area consumer confidence also fell in March, to -14.5 from -13.6 in February, confounding market predictions of an improvement to -13. Although there are not details as yet of the breakdown of Euro area sentiment, the likelihood is that increased concerns around a threatened trade and tariff war between the US and the EU weighed on the mood of European consumers, particularly in circumstances where the overall economic environment remains quite fragile.

At the margin, a further cut in ECB policy interest rates, the prospect of some easing in fiscal constraints and, perhaps, the possibility of a ceasefire in Ukraine or even the boost to economic activity from increased defence spending may have helped Euro area consumer sentiment.

However, it should also be recognised that trade with the US is altogether less important for most Euro area economies than it is for Ireland. 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 should be noted that UK consumer sentiment improved slightly in March, with improved thinking on household finances more than offsetting increased negativity about the economic outlook. While the level of consumer sentiment in the UK remains downbeat, the uptick in March was something of a surprise.

With weaker economic data of late, the Bank of England becoming gloomier on prospects for activity and inflation, higher energy bills looming and a further deterioration in the fiscal outlook threatening more cutbacks to benefit spending, it could be that April data will see a correction of the March increase in UK consumer confidence.  
 

March sees Irish consumers more negative about economy and household finances        

As table 1 above indicates, all five main elements of the March reading of the Credit Union Consumer Sentiment Survey (in partnership with Core Research) were significantly weaker in March than in February.

Not surprisingly, consumers marked down their expectations for the future further than current conditions. Again, as might be expected, thinking on the economy and jobs worsened more than did views on household finances, although all elements of the survey saw a clear weakening.

The most notable development during the March survey period was a substantial ramping-up of tariff and trade threats between the US and the EU. The survey period saw considerable media focus on the risks to the Irish economy of increased restrictions on trade with the US as both sides gave clearer indications of the possible actions they would take.

With US tariffs on aluminium and steel taking effect from mid-March and the details of EU-specific tariffs set to be announced on April 2nd, the EU announced the intention to put tariffs on €26bn of US exports to the EU. In response, US President, Donald Trump, threatened tariffs of 200% on a range of EU alcohol products.

Faced with the noisy and growing threat of a global trade war through the March survey period, it is not in any way surprising that Irish consumers materially marked down their views on the outlook for the Irish economy this month.

As employment conditions represent the most meaningful metric of Irish ‘macro’ conditions for most consumers, the downgrade to the outlook for jobs was greater than the more general economic outlook.

The survey period saw job loss announcements in TikTok and Workday but data released during the period showing a 3.9% unemployment rate in February 2025, the lowest rate since April 2001. In these circumstances, it seems likely that the dominant influence on sentiment was the increasing threat of trade war.

While somewhat smaller than the declines in ‘macro’ elements of the survey, March also saw a distinct negative turn in Irish consumers thinking on their own financial circumstances. Again, the prospect of a trade war leading to job losses, weaker tax revenues and a less supportive fiscal stance as a result is likely to have been the main driver of weaker sentiment, a perception that chimes with Minister for Finance. Pascal Donohoe’s post-survey warnings in this regard .

However, the survey period also saw reports of a pick-up in grocery price inflation, an announcement of substantial increases in electricity and gas prices by one supplier and a spate of increases in health insurance costs.  In these circumstances, a further ECB rate cut appeared to have little impact on sentiment.

Encouragingly, the March survey saw a slightly smaller deterioration in the buying climate than in other elements. This suggests that fear rather than weaker finances are the key influence on weaker confidence. This distinction may serve to limit the near-term negative impact on consumer spending, at least until the exact nature and extent of tariffs and other threats to Irish economic prospects become clearer.

Section II; Where do Irish consumers get their information on the economy and financial conditions?

As usual, the Credit Union Consumer Sentiment Survey (in partnership with Core Research) included supplementary questions on topics of current interest.

For the March survey, we looked at the various sources Irish consumers use to form their thinking on the economic and financial environment they face.

The range of answers shown in table 2 below suggest that Irish consumers glean their information on a complex and rapidly changing economic and financial environment from a wide variety of sources.


With the usage of sources of economic and financial information by Irish consumers varying widely, the results shown in the diagram above suggest a quite fragmented picture when it comes to how Irish consumers form their understanding of their economic and financial circumstances. There is certainly no sense of a universal ‘well’ from which all Irish consumers draw information to form their views on economic and financial matters. 

Perhaps reflecting the complexities of the current economic picture, Irish consumers appear willing to draw on multiple sources. None of the various categories of providers of economic and financial information are entirely shunned (i.e. never used) by more than 50% of consumers, implying that Irish consumers are open to information coming from a wide variety of sources.

That said, all providers see significant numbers of consumers opting not to use them suggesting significant diversity in the sourcing of information on economic and financial developments.

TV and radio is seen as the most important ‘main’ source of economic and financial news but, with just 20% of Irish consumers citing this channel as their main source, the survey results emphasise the wide range from which Irish consumers draw in their efforts to understand what for most is an important and familiar but still perplexing topic.

With a further 38% saying it is an important source, these results suggest TV/Radio is the most important medium for information on economic and financial developments.

However, a substantial 36% of Irish consumers say they rarely or only occasionally  use TV/Radio for economic and financial information with a further 6% saying they never use it. While TV/radio was cited as an important source across all demographics, those aged over 55 were roughly three times more likely to cite it as their main source than those aged under 35.   

Social media is the main source of economic and financial information for 14% of consumers and an important source by a further 21%, but a slightly larger 37% say they would rarely or never use this medium as a source for economic and financial information.

Social media tended to be more important as a source of economic and financial information for females than for males. Nearly three times as many aged under 35 regard this as their main or an important source of economic and financial information as among those aged over 55. This response was also more prevalent among those citing difficulty making ends meet than among those make ends meet with ease.

Mainstream newspapers are favoured by some 13% of consumers as their main source of economic and financial information but are seen by a substantial further 29% of consumers as an important source of information on this area. It is notable that the number of consumers who rarely or never use mainstream newspapers as a source of economic and financial news at 29% is somewhat lower than the number ‘shunning’ social media.      

Mainstream newspapers tended to be cited more frequently as a main or important source by males than females, by those aged over 65, by consumers with a higher degree and those on higher incomes.

While just 9% of consumers say their main source of economic and financial information is from friends and family, a further 33% cite this as an important source. It is also notable that just 20% of consumers say they would rarely or never get economic and financial information from family and friends, suggesting that consumers’ social circles are not dismissed to the same degree as other information channels in this context.

Family and friends tended to be cited as a main or important source of economic and financial information by females than by males and by those aged under 35. 

As the table above indicates, very few consumers draw on the various ‘professional’ providers as their main source of economic and financial information and somewhere in the region of two-thirds of Irish consumers would rarely or never rely on these sources.

However, this means a still significant 20 to 25% of consumers would at least occasionally draw on these providers for information on economic and financial developments. This might reflect the importance of economic developments to consumers circumstances as well the variability of the economic and financial environment in recent years.

‘Specialist’ sources tended to be used as a main or important source of economic and financial information by males than females, by younger consumers, by those with higher educational qualifications and by those on higher incomes. 

Does turning on TV or the radio turn you off the economy?

We thought it might be interesting to see whether there were differences in the overall assessment of current economic and financial conditions related to the main sources of information used by Irish consumers. However, due to the limited samples in the various categories, it is only possible to provide qualitative rather than quantitative results.

In broad terms, it would appear that those who use mainstream newspapers and TV/Radio tended to have a more negative view on the outlook for the Irish economy and jobs than those who get economic and financial information primarily from other sources whether that be ‘professional’ providers, social media or family and friends.

In relation to their assessment of their own household finances, those who rely primarily on TV/Radio tend to be somewhat more negative than those drawing on newspapers and markedly more negative than those using other sources.  This could be due to the frequency of warnings on the economy in these media or the nature of those warnings. One can argue that forewarned is forearmed but the broad tone across all consumers at present is one of nervousness.

In circumstances where uncertainty seems to be the only certainty for Irish consumers and the balance of risks is clearly tilted to the downside, striking an appropriate balance between informing and alerting rather than alarming consumers is a difficult task for commentators but one that may have important consequence for consumer sentiment and spending.    


The Credit Union Irish Consumer Sentiment Survey is a monthly survey of a nationally representative sample of 1,000 adults. Since May 2019, Core Research have undertaken the survey administration and data collection for the Survey. This tranche of the survey was live between March 4^th and 20^th 2025.