Consumer sentiment dipped to its lowest level in more than seven years in July amid concerns about the economic outlook and implications for the labour market, a survey said today.
The IIB Bank/ESRI consumer sentiment index dropped to 60.9 in July from 65.8 the previous month.
It was the largest monthly fall since August 2002 and the lowest figure in the seven-and-a-half-year history of the index.
The sentiment figure has been edging down from a peak of 68.4 in April, when confidence was boosted by a European Central Bank interest rate cut and the fall of Baghdad to US-led forces in Iraq.
IIB Bank chief economist Mr Austin Hughes said the July reading reflected a spate of high-profile job cuts and worries about the deteriorating public finances.
However, he noted that while overall sentiment about global conditions and the knock-on effect on the domestic economy was poor, households had not marked down their view of their own financial situations.
"There are significant off-setting factors, including a falling inflation rate, lower mortgage lending rates and the buoyancy of the housing market," he said.
"The resilience of household finances is probably a more important barometer of the near-term spending outlook."
While the data suggested the economy was facing into "a tricky period", he cautioned against an excessively pessimistic interpretation, saying it was possible the July data was exceptional.
The three-monthly figures showed the underlying trend was still above levels seen in February and March and remained broadly in range for the year, he added.