The latest survey of business conditions by small business group ISME has found that, while conditions are tough, there are a few positive signs.
But ISME says the gap between performance of the exporting and domestic sectors is widening, with retail business in particular still struggling.
The group's survey of 630 companies shows that overall, business confidence in the second quarter remained negative, with the number of firms who are less confident about their prospects slightly outnumbering those who were more confident. The retail sector was by far the most pessimistic, with transport the most optimistic.
Retail also recorded the most job losses and was the most pessimistic sector about future job prospects.
Overall, a net 20% of companies reduced staff levels in the three-month period, But employment prospects improved slightly, as 19% of firms expected to increase employment over the next year, with 22% expecting to cut. These were the best figures for three years.
There were also some positive figures on exports, with the number of companies reporting increases reaching its highest level for 10 years. The number of firms increasing their investment levels was also the highest for almost three years, according to ISME.
But more than half of firms continued to report that their sales were down, while there was a slight drop in the percentage of companies expecting an increase in profits in the coming months.
Economic uncertainty remains the biggest worry for companies, with 39% identifying this as their main concern.
Referring to the problems facing companies in the domestic market, ISME head of research Jim Curran urged the Government to bring in more measures to stimulate demand by providing consumers with the confidence to spend.
