Subdued Irish Consumer Sentiment Shows Little Change at End of 2025

Irish consumer sentiment finished 2025 with minimal change, reflecting ongoing concerns over living costs, despite the country's economic growth. The Credit Union Consumer Sentiment Survey recorded a slight increase to 61.2 in December from 61.0 in November. This remains far below the long-term average of 83.6 and the reading of 73.9 from a year ago.

Consumer confidence has barely improved since April's two-year low of 58.7, when U.S. tariff concerns reached their peak. The survey's authors noted a 'broadly based downgrade' of Irish consumer thinking regarding economic conditions and personal finances. Ireland's significant trade relationship with the U.S. appears to weigh on consumer sentiment.

In contrast to the subdued Irish mood, consumer confidence in the eurozone and the United Kingdom has shown some improvement since falling in April due to trade-related concerns. Despite the cautious consumer outlook, Ireland's economy, measured by modified domestic demand (MDD), has grown by 4.1% year-on-year in the first nine months of 2025, defying the negative sentiment.

Why Did This Happen?

The U.S. tariff environment has had a notable effect on Irish consumer sentiment. With the U.S. being a crucial economic partner, trade-related concerns naturally influence consumer perceptions. The survey's authors emphasized this link, suggesting that trade issues are a significant factor in shaping Irish consumer expectations.

Despite strong economic growth, the ongoing worries about living costs have kept consumer confidence low. The slight increase in the December survey does not indicate a broader turnaround. This trend highlights the divergence between macroeconomic indicators and consumer behavior.

How Markets Responded

Ireland's economic growth has outpaced the pessimistic consumer sentiment. The modified domestic demand (MDD) metric, which officials prefer, rose by 4.1% year-on-year in the first nine months of 2025. This growth contrasts with the weak consumer outlook and suggests a potential disconnect between official economic data and private sector sentiment.

The subdued consumer sentiment has implications for consumer-driven sectors. Companies in the retail and service industries may face challenges as consumers remain cautious about spending. This cautious behavior could influence market dynamics and corporate strategies, particularly for firms reliant on consumer demand.

What Analysts Are Watching Next

The survey's authors noted that the economic environment remains complex. While the Irish economy has shown resilience, the consumer sector continues to be a weak spot. Analysts will closely monitor how consumer confidence evolves in the coming months, especially as global trade tensions persist and living costs remain a concern.

Market watchers are also paying attention to the broader implications of the U.S. tariff environment. The impact of trade policies on consumer sentiment could influence investment decisions and market strategies. Investors may need to factor in these dynamics as they assess the outlook for Irish markets and related sectors.

The current situation underscores the importance of understanding consumer behavior in the context of global economic trends. As Ireland continues to navigate these challenges, the interplay between economic growth and consumer sentiment will remain a key focus for analysts and investors alike.