GROUND FLOOR/Sheila O'Flanagan: Despite some uplifting news from US manufacturers and the unexpected surplus in the public finances, it's still hard to remember a more difficult start to a year in recent times.

The economic condition of the world is still overshadowed by the imminent clouds of war and all its awful consequences.

When I was a child my parents occasionally talked of the second World War but it always seemed some kind of dim and distant irrelevancy to me. And yet, for them, it had happened a mere 25 or 30 years earlier. Now that I can remember events that occurred 30 years ago with sometimes startling clarity myself, I can understand now how they felt when I dismissed their remembrances of their childhood experiences as historical rubbish.

What was the point, I used to ask, in harking back to the past? It's over. Forget about it. Move on. Only, of course, the past shapes the present and the future, and many of us find it difficult to move on.

It can take a long time to recover from events of your childhood and some never do, with those experiences influencing lives in the most unexpected ways for years to come.

I never quite got over an argument with a teacher about dividing a bar of chocolate equally among seven people. The pictured chocolate was already in eight squares. My view was that one of them could have two squares, that you'd never manage to break that eighth square properly and that it was absolutely impossible to divide it equally.

Besides, I pointed out, the owner of the chocolate should surely have first call on the extra square. I was made to stand at the back of the class for the rest of the lesson and never felt fully comfortable with fractions after that.

Which was a bit of a disadvantage when I moved into bond markets where, at the time, everything was quoted in fractions rather than decimals, and I had to take a crash course in learning to divide things equally after all.

If the teacher had realized that I wasn't being deliberately disruptive, and that chocolate was a subject dear to my heart, I might have advanced further in the realms of mathematics.

As it was I became more suspicious of numbers than I needed to be - I sometimes wonder how I ended up in finance at all. (Probably because I have a terrible tendency to want to do things that scare me - like occasionally investing in equity markets.)

Recent experiences in stock markets mean that investing is not high on the priority list for January. For the past three years analysts have tried to forecast a recovery in the third or fourth quarters and each time they've been wrong.

Given that last year was a disaster for most investors, only the very brave will take the plunge now. In trying to look for signs of improvement some are making comparisons with the oil-price induced bear market in the 1970s and are hoping for a similar sharp post-recession upward movement next year.

But for the bounce to happen people will have to feel much more comfortable with the overall world view than they do and that's definitely one area where we simply can't feel confident at all. So, though I'm optimistic that there will be less corporate scandals in the coming year, I'm not very confident that the consumer will be able to take it all on his or her shoulders again in 2003.

The man and I did our bit to boost consumer spending this week by tripping into the sales but, to be honest, my heart wasn't really in it. Not because I can't shop with the best of them but because I really can't cope with seeing bundles of clothes in sizes that bear no relation to my body.

Happily they probably don't mean a lot to other women too because there was a pile of size eight skirts on a clothes rack in Debenhams that were being clucked over in despair by people who had stocked up on the pud and cake at Christmas and who were probably already making plans for the New Year diet.

Most of the retailers I spoke to, however, were quietly confident that they were doing well in the sales. Maybe not by shifting lots of little skirts but by getting buyers for the bigger items like furniture and white goods, neither of which were selling too well before Christmas. And let's face it, you'd have to sell a lot of size eight skirts to compete with a new living-room suite.

But the preliminary word out of the US is that retailers have found it a difficult holiday season - Wal-Mart has said that this looks to be the weakest in 30 years, which is pretty awful, bringing our memories right back to the gloom-laden 1970s again. World economies are still looking to the consumer to keep them afloat and hoping that sustained spending will impact on the bottom line of the companies in which we invest. But the consumer may well be running out of steam. And if we stop spending who knows where economies will end up in 12 months' time.

Once again Irish forecasters are making a stab at how the domestic economy will perform and there is a welcome inevitability at the extent of the bullishness and bearishness.

In the most recent forecasts for Irish gross domestic product (GDP) growth my ex-colleagues in NCB remain the most bullish (at 6 per cent) while on the opposite side of the coin, as always, are Davy's, where sackcloth and ashes must be replacing the hand-tailored suits.

They've predicted a mere 2.6 per cent, which is the lowest of all forecasters. And it was a similar theme last year, when the NCB crew maintained their optimism by calling for GDP growth of 7 per cent, while Davy's thought it would be closer to 3.8 per cent. In fact it looks like being about 4.5 per cent, which means the bears have it for now although there was no need, perhaps, to cancel the tailor.

In fact, maybe the gurus in Davy's might nip across to Grafton Street and spend a bit more themselves - as their economic duty.