The latest reading of consumer sentiment shows a small increase in confidence as Irish consumers appear to detect some slightly more encouraging developments.
The KBC Bank Ireland/ESRI consumer sentiment index rose to 62.3 in June from 61 in May, bringing it close to the six month high of 62.5 in April.
KBC noted that the three month moving average - which gives a clearer picture of trends - edged higher in June to its strongest reading since August 2010.
But the index showed people remain very nervous about the economic outlook.
People are slightly more worried about the employment outlook and the increasing level of long-term joblessness. KBC said that people are probably paying more attention to the threat of layoffs and the likely persistence of unemployment than they do to the continuing signs of new hiring.
But KBC's chief economist Austin Hughes said that ''darker economic clouds appear to have had some significant silver lining'' in terms of household finances. He said that while Irish people know the escalating euro crisis is not a good thing, it does result in some positive side effects including lower oil prices and the prospects of lower borrowing costs.
''We think an increasing focus on the possibility of an ECB rate cut likely contributed to a somewhat less negative view of personal finances in the June sentiment survey,'' he added.
While Irish consumers remain fairly downbeat in regard to their own financial prospects, KBC said there had been a drop in the proportion of consumers that expect a further worsening in the coming year. It noted that the number expecting such a deterioration has eased from 63% in December to 45% in June.
The survey also suggested that consumers may be more willing to contemplate ''selective increases'' in outlays due to the chance of lower borrowing costs and fuel bills. It may also reflect some seasonal purchases related to holidays.
KBC said a significant driver is likely to have been the expectation of bargains in the summer sales, as retailers have had to resort to heavy price discounting to shift stock due to the poor weather and economic climate.
''The June survey results are encouraging in that they suggest the extreme negative influences on Irish consumer spending and spending power continue to fade gradually,'' Mr Hughes stated.
''However, the details of the survey also emphasise that any turnaround in the mood of Irish consumers is likely to be an uneven and extended process,'' he added.
