Fears about unemployment and the sluggish nature of economic recovery weighed on consumer sentiment in July.
The latest Consumer Sentiment Index published by KBC Bank Ireland and the ESRI notes that after a siginficant improvement in confidence during the previous month July saw an "understandable correction".
The index fell to 68.2 from 70.6 in June, which was its highest since October 2007.
News that Ireland had slipped back into recession during the final quarter of last year appeared to have "struck a chord with consumers", according to KBC's analysis of the July survey.
Perceptions of the outlook for jobs in July was also weaker. The proportion of consumers who expected conditions in the jobs market to weaken further in the future rose from 33% in June to 43% in July.
Consumers were also more negative than they had been during the previous month in their assessment of the health of their household finances.
"Concerns about the possible scale and nature of austerity measures in next October's budget may have played some role in this regard," according to KBC.
