Consumer sentiment dropped sharply in March, as a spate of high-profile redundancies caused consumers to worry about job security.

The Irish Consumer Sentiment Index, produced jointly by IIB Bank and the Economic and Social Research Institute, fell to 92.3 in March from 102.3 in February.

The last substantial fall in the index occurred last October, in the wake of the Rip Off Republic television series. The latest fall was driven mainly by news of layoffs in companies such as Greencore, Wyeth Medica, NEC, Magee Clothing and Saehan Media. Concerns about the impact of immigration on the jobs market and a second successive interest rate increase also weighed on consumer's minds in March.

The number of consumers fearing future job loss rose sharply to 53 per cent in March from 39 per cent in February, the survey found.

Austin Hughes, chief economist of IIB, said the results tended to overstate the deterioration in consumer sentiment: "As we have noted previously, the announcement of a given number of job losses tends to influence consumer sentiment far more than the announcement of a similar number of new jobs. This is understandable because the fear of job loss resonates more forcefully with most consumers than the possibility of a new job offer."

Mr Hughes pointed to what he said was a disparity between good news about the economy and the less positive mood of many consumers who he said were disconnected from it. "The driving force behind the Irish boom is a rapid increase in the numbers working and living in Ireland. The 'average' consumer may feel that economic commentaries portraying an economic landscape overflowing with milk and honey are very much at odds with their personal experience," he said.