Consumer sentiment hit a ten year high in December, according to the latest survey from KBC Bank Ireland and the ESRI.
Its Consumer Sentiment Index rose to 103.9 last month, as respondents were more optimistic about the jobs market as well as the wider economy.
The figure was only a marginal improvement on November, however the rise was enough to push the index to its highest point since January 2006, when it stood at 106.2.
According to the survey, consumers were more positive about their earning and spending prospects in December, according to KBC/ESRI, while a pent-up demand was also boosting activity.
However Austin Hughes, chief economist with KBC Bank Ireland, said that there was no sense that a broad ‘feel-good’ factor had returned to the economy, and many consumers remained cautious as a result of the recent economic crash.
"The limited monthly change in the confidence index suggests the average Irish consumer isn’t seeing any dramatic improvement in their circumstances at present but there is a clear sense that in terms of the outlook for jobs and household finances things are moving in the right direction and consumers are facing into 2016 on a broadly positive note," Mr Hughes said.
He also said that while pent-up demand is boosting household spending at present, it would be wrong to suggest that a renewed consumer boom is underway.
Daniel Foley of the ESRI also noted that consumers were more cautious about their own financial situation over the next 12 months, despite them expecting things to improve in the broader economy.