Despite rising optimism, the majority of consumers are still pessimistic and cautious in their spending. Cliff Taylor, Economics Editor, reports

Consumer confidence has improved markedly for the third month in a row, according to new figures from the Irish Times/TNS mrbi monthly survey.

They show that the percentage of people expecting conditions to weaken over the next year has fallen to 41 per cent, down from 55 per cent the previous month and a high of 70 per cent in the August survey.

The latest survey, taken between October 14th and November 6th, show the percentage expecting conditions to worsen has fallen below 50 per cent for the first time since the survey started in April of this year.

With 41 per cent expecting employment conditions and the economy to weaken over the next year, the latest survey shows 21 per cent anticipating an improvement, up from 14 per cent in the previous survey and a low of 7 per cent in August.

Of the remainder, 35 per cent said conditions would remain the same and 3 per cent were "don't knows".

The latest results of the Pulse monitor add to other recent survey results pointing to an upturn in the economy.

They indicate that consumers are either seeing real evidence of an upturn in the economy or that they are encouraged by consistent reports of recovery, led by the US economy.

There is increasing evidence in the US that a real upturn is under way, with the economy growing at an annual rate of 7.2 per cent in the third quarter.

In the EU - including the Republic - many signs of recovery are based on survey evidence of an improving mood in manufacturers, the service sector and among consumers. However, recent Central Statistics Office figures suggest that economic growth revived in the State in the second quarter of this year.

Reports of all these indicators - and the fact that unemployment has remained remarkably low - are likely to be contributing to the improved consumer mood.

In the Irish Times/TNS mrbi monthly survey, consumers are asked: "Thinking about the year ahead, do you think employment levels and the Irish economy in general are set to improve, weaken or remain the same?"

The latest results show continued improvement in the consumer mood across all regions and in all the main social groups.

The most notable feature in the breakdown of the figures is that men are more upbeat than women.

Some 37 per cent of the men surveyed expect conditions to worsen, compared with 44 per cent of females. Meanwhile, 23 per cent of males anticipate an improvement in the economy and employment conditions compared with 18 per cent for females.

The improvement in recent months is particularly marked among those designated as "chief income earners", suggesting that many people are seeing signs of improvement in their workplace.

The percentage of this group expecting conditions to weaken has fallen from a high of 75 per cent in August to 40 per cent in the latest survey.

Over the same period, the percentage anticipating an improvement has risen from just 7 per cent to 23 per cent.

Among those defining themselves as business people, 39 per cent expect conditions to weaken and 20 per cent anticipate an improvement.

While the figures have improved in recent months, the fact that the balance of consumers are still pessimistic gives cause for caution in interpreting the latest figures. It also suggests that consumers will, on balance, remain cautious in spending in many areas.

The most optimistic group is retired people, with the latest figures showing 35 per cent expect conditions to weaken, just ahead of the 31 per cent who anticipate an upturn.

This is a significant turnaround from the August figure, where 69 per cent were pessimistic and just 8 per cent expected recovery.

The August survey was taken in the wake of some major job loss announcements in the early summer, which probably affected the consumer mood in that period.

PhoneBus methodology

The information presented in this report was obtained as part of TNS mrbi's PhoneBus survey in the Republic of Ireland

Sample structure: The survey was based on a representative sample of adults, i.e. males and females aged 15 or over. Respondents are selected for interview through random digit dialling. Telephone numbers are computer-generated at random and then screened for business numbers, faxes, modems and disconnected numbers. This method of respondent selection ensures that ex-directory households are as likely to be selected for interview as listed households.

Each survey has targets that must be met in relation to sex, age, social class and region. Quota controls are imposed for region, by age within sex and social class within sex.

Supervision of the interview procedure is carried out throughout the fieldwork period. These controls ensure that the final sample reflects the profile of the national population aged 15 and over.