More building jobs to go but firms are upbeat

Further job losses are expected in the construction sector and consumer spending remains week, according to a new survey.

However, despite this, there are signs the economy is showing signs of recovery.

It is the first time since 2007 that participants in quarterly surveys carried out by KBC Ireland bank have been upbeat about the prospects for the economy, according to bank chief economist Austin Hughes.

The findings are contained in a survey conducted by the bank, in conjunction with Chartered Accountants Ireland (CAI).

The construction sector was no longer the weakest area of the economy. It was the consumer spending sector, it was found.

Other commentators have said that until consumers start spending again the economy will remain weak and a resurgence in this sector is dependant on getting people back to work.

Currently there are close on 400,000 out of work.

The autumn business assessment carried out among 340 companies shows:

* 22% of businesses reporting stronger levels of activity in the past three months.

* 49% reporting weaker conditions.

* 33% of firms feeling more optimistic about the economy, while 29% gave a more negative assessment.

* 56% of firms felt the setting up of the National Asset Management Agency (Nama) was the right way to go.

* 27% were unsure.

* 35% of businesses felt Nama would make no difference to the amount of bank lending.

* Two thirds of those in construction said they expected more job losses.

Overall, the survey says that while conditions remain tough they are not as bad as they were.

While business conditions continued to weaken in the third quarter the pace of decline was much slower than in the past four quarters.

Mr Hughes said the findings indicated a potential step towards economic recovery.