THE 'feel good factor' in Wales is running at a near record level despite job losses overshadowing the steel and electronics industries.

According to the Consumer Market Outlook by Consumer Futures, the consumer research arm of economic analyst Business Strategies, only Scotland and Northern Ireland have higher levels.

However, the survey suggests that consumer confidence in Wales could be adversely affected later this year as job cuts start to bite.

The report shows that in the run up to the General Election, sentiment has been largely unaffected by the foot-and-mouth epidemic and its knock-on effects. People seem equally oblivious to the effects the slowdown in the United States could have on the Welsh economy.

Anthony Light, senior economist at Consumer Future, said: "There could be a hangover ahead for the Principality as news of some of the high-profile job losses sinks in later this year. Indeed, the alarm bells may be starting to ring in some Welsh homes. The report shows that fears over unemployment rose markedly in the first quarter. On this score, people are at their gloomiest for two years."

But the report indicates a "remarkable" sign of resilience in the face of problems. The proportion of those who thought it was a good time to make a major purchase such as a car, computer, tv set, washing machine, fridge or freezer remained strong and close to the record level achieved in the third quarter of last year.

Additionally the optimism about the outlook for the economic situation over the next 12 months has strengthened to its best level in more than a year. Optimism about prospects for household finances was down a little but remains strong.

The 'feel good factor' in Wales, as measured by the Consumer Sentiment Index, stood at 32, the highest since the end of 1997.

The long term average for Wales since the figures were first collected in 1976, covering the recession-hit early 1980s and 1990s is only 16.1.