Consumer sentiment in May dropped for the first time since December on renewed concerns about the eurozone and increased uncertainty ahead of the recent fiscal treaty referendum.
The KBC Bank Ireland/ ESRI consumer sentiment index fell to 61 in May from 62.5 in April.
However, KBC noted that the underlying trend in consumer sentiment, as measured by the three-month moving average of the series, increased slightly in May to 61.4 from 60.1.
The bank's chief economist Austin Hughes said that the May fall ''seems to be an almost inevitable correction following improvements in sentiment in each of the previous four months''.
He also said the still fragile Irish economy means that a ''straight line'' improvement cannot be expected.
The index reveals that the sharpest drop in the survey was seen in relation to the general economic outlook, but the jobs element of the May survey was ''particularly encouraging''.
KBC says that while Irish consumers remain cautious about the employment situation, the increasing frequency of new jobs announcements and signs of a stabilisation in the Live Register seem to have prompted a less negative assessment of the outlook for jobs.
There was also a marginal improvement in consumers' assessment of the outlook for their household finances in the next 12 months.
However, one in three consumers still expect their spending power to weaken in the year ahead, compared to just one in 10 that expect an improvement.
''Providing Irish consumers aren't swept away by sporting euphoria or gloom this month, the June survey results will probably confirm a picture of a consumer who has become slightly less fearful of late but still faces substantial financial pressures,'' the economist said.
He says the May data emphasises the continuing absence of a ''feel good'' factor that would spark a substantial improvement in consumer sentiment and spending.