Consumer sentiment in the Republic weakened last month mainly because of continuing concerns over the global economy.

Despite this, according to an IIB/ESRI consumer sentiment survey, the prevailing mood is one of "cautious optimism".

The drop in the IIB/ESRI consumer sentiment index to 97.3 in April from 104.2 in March effectively means consumer sentiment has been fairly flat since the end of 2004.

The authors say the global economy is going through a "soft patch" and sentiment has been weakening in the US, Britain and the Republic.

The authors say there has also been a lack of good news for consumers in their daily lives.

"Irish consumers are not seeing the type of gains in their financial position they might expect on the basis of upbeat economic forecasts," says the survey.

"The current reading is still indicative of a healthy consumer in a solid economy.

"We think the April sentiment reading remains consistent with an increase in consumer spending of between 3 and 4 per cent in 2005.

"However, the main message of these data is that consumers seem to be notably more cautious than most domestic economic commentators at present," said a statement.

It points out the latest data do not take account of recent cutbacks announced at Waterford Crystal and IBM.