A new survey shows that business confidence sentiment is on the increase and is at its highest level since 2007 - despite the ongoing challenges the economy is facing.

The PricewaterhouseCooper's 2013 CEO Pulse survey reveals that 31% of chief executives are upbeat about the outlook for Ireland's economy compared to just 22% last year.

44% of Irish CEOs are favourable about the outlook for their own businesses with 56% expecting revenue and 53% predicting profit growth this year.

Capital investment is also on the increase with 43% of company bosses now planning to invest compared to 33% last year. However, just 34% of bosses expect employment levels to grow this year compared to 40% last year.

The survey revealed that Irish CEOs are more concerned that their European counterparts on a range of economic and business threats, while they are also concerned about a skills mismatch possibly impacting the performance of their business.

Irish bosses believe that an increasing tax burden - especially on employees - is the biggest threat facing businesses, while 80% said over-regulation was also a concern.

''Despite ongoing challenges, Irish businesses are actively looking for growth opportunities,'' commented Ronan Murphy, a senior partner with PwC.

''At the same time, they are sticking to what they know best, investing in their businesses, while trying to balance efficiency and value. Consequently, they are emerging more agile and resilient. As an exporting economy, our recovery will depend on the extent of the pick-up in the economies with which we trade,'' Mr Murphy added.