Fears of rising oil prices depressed consumer sentiment in August, according to the latest survey of attitudes compiled by IIB Bank and the ESRI.
The monthly confidence survey posted a reading of 93.6 in August compared to a figure of 96.6 in July.
According to IIB economist Mr Austin Hughes, the decline in confidence reflected a more downbeat assessment of the outlook for employment and economic prospects and gloomy predictions about the possible impact of higher oil prices that attracted attention in early August.
Despite the decline in confidence Mr Austin Hughes remained sanguine about the economic outlook noting that although Irish consumers may have been concerned about rising energy costs, they were still ready and willing to hunt for bargains in the end summer sales.
"That suggests that household spending continues to grow," he said.
Mr David Duffy of the ESRI noted that forward-looking sub-index also weakened to 87 in August from 93.6 in July, mainly due to a decline in expectations regarding the labour market.