A survey of the mood among businesses has found that most are more upbeat about their own firms than the broader economy.
The business sentiment survey, carried out by IIB Bank and the accountants' body ICAI, showed that 79% of firms were less optimistic about the general economy than three months ago.
But they do not see any quick recovery - just over half of firms think the Irish economic downturn will last one to two years, while a quarter fear it could last even longer.
The survey shows that conditions vary between sectors, and 54% of firms reported flat or increasing activity. 42% felt their own company's performance would not be affected by wider economic problems.
IIB economist Austin Hughes said credit conditions were emerging as a big problem for businesses, with one in four companies saying the credit crunch was having a 'substantial impact' on them. 75% reported that costs had risen in the past three months, but only 5% felt they would be able to pass these on through higher prices.
IIB and ICAI interpreted the findings as showing that the Irish economy was 'weakening, but not in freefall'.
