Bubble — what bubble? For all the talk of a funding boom, Bay Area investors are plagued with doubts this summer due to Facebook’s disappointing IPO and the deepening debt crisis in Europe.

The results of the quarterly Silicon Valley Venture Capital Confidence Index, released today, shows declining confidence that the Bay Area will be shielded from the global economic recession. This news seems somewhat surprising considering that this is peak time for fundraising, and firms are newly flush with cash.

“Venture capitalists are future-oriented,” Mark Cannice, the Professor of Entrepreneurship and Innovation from the University of San Francisco who compiled the report, told VentureBeat.

Elton Sherwin of Ridgewood Capital, one of 30 investors interviewed for the report this June, explained that startups conduct their business internationally more so now than they have done in the past. As a result, investors have to account for macro-economic trends, particularly in China and Europe.

While the life sciences are lagging due to regulatory restrictions, certain sectors remain relatively untouched by the doom and gloom. It will come as no surprise that the market for mobile, social, local, and cloud (our favorite buzzwords!) is stronger than ever, and that’s giving Bay Area investors cause for optimism.

“The innovation economy in Silicon Valley continues to hum along, despite the coughs and sputters in the global economy,” said Shomit Ghose of Onset Ventures.

Other insights from the report include renewed confidence in the exit market, despite the substantial decrease in the number of venture-backed IPOs last quarter. Igor Sill of Geneva Venture Management reported that his firm has 168 companies in the IPO pipeline. “Our economy is definitely showing strong signs of realizing continued returns for venture investors,” he said.

And, finally, migrating to San Francisco is all the rage these days. Startups are relocating from the Peninsula to the city, and venture capital firms are following suit.

The venture capital firms that participated in this survey include BlueRun Ventures, Allegis Capital, Canaan Partners, Morgenthaler Ventures, and Trinity Ventures.

Facebook IPO Image via Reuters