The Small Firms Association says the economic prospects for 2006 are strong after what it describes as a 'remarkable' 2005.
In its end of year statement, the group forecasts economic growth of 5% next year, with continued full employment and 5% higher consumer spending.
The SFA says underlying inflation is low, but any further interest rate increases by the European Central Bank could push the headline inflation rate higher.
But director Pat Delaney warned against over-optimism, saying strong domestic inflation was putting many export businesses under severe pressure, while manufacturing lost another 6,400 jobs last year. He said the main challenges for 2006 were to regain competitiveness and permanently eliminate the inflation gap with the rest of the euro zone. He called for speedier reform of the public sector.
