Consumers are beginning to see a change for good in the economy.

The latest sentiment index from KBC Bank and the ESRI is the strongest one since January 2008.

Consumers are less negative about job losses and their spending power.

Chief Economist with KBC Austin Hughes says while the “feel-bad” factor has not disappeared – it’s on the way out.

“Prices have come down; we know that probably the worst of the pay cuts are now over, and also we didn’t see tax increases in the last budget” he said.

“So it’s the economy struggling forward, but consumers are noticing that things are getting slightly less worse by the day – and that’s pointing to the fact that probably the Irish economy as a whole is beginning to come out of recession” he added.