Consumer sentiment fell four points to 49.5 last month, according to the latest KBC/ESRI index.
This compares to a figures of 53.4 in June and to an all-time low of 39.6 in July 2008.
KBC's chief economist Austin Hughes said the decline last month wasn't a surprise given the large improvement in June and added that it appears that the underlying trend in sentiment is stabilising even if a return to anything like normal conditions in confidence and consumer spending may still be far away.
The results for July show that consumer sentiment weakened primarily due to consumers becoming more negative about the economic outlook for the next 12 months
Mr Hughes noted that while the recently published IMF report, which detailed how the Government’s budgetary policy went off the rails in 2007 and 2008 and a spate of job loss announcements had impacted on consumer confidence, the decline in consumer sentiment could have been much worse.
"It is notable that consumer sentiment measures weakened in Ireland and in the US in July whereas similar indicators improved in a number of continental European economies. This may owe something to a notably greater fear of job loss both here and in the States which is weighing on confidence and household spending," said Mr Hughes.
"This raises important questions as to whether ‘speedy’ job cuts will limit the final cost in terms of employment and whether other economies can successfully ‘hoard’ labour through the downturn," he added.
