Four out of five owner/managers of small firms feel the business environment is improving, while two thirds of them expect to be hiring new staff in 2016, according to a new survey.

The Small Firms Association's New Year Outlook also shows that over 40% of firms see domestic economic growth as their biggest opportunity in 2016.

Other positive factors identified were specific sectoral opportunities (14%), exporting (12%) and bringing new products to market (10%).

Over 65% of survey respondents indicated their intention to recruit over the coming year, up slightly since the last survey in June.

Commenting on the results, SFA Director Patricia Callan said: “Small firms have a crucial role to play in job creation around the country, reducing unemployment and attracting emigrants home to work.

“We expect small firms to create 30,000 jobs in 2016,” she added.

However, the survey results highlight a number of risk factors identified for small businesses in 2016, including cashflow issues (18%), rising business costs (15%), economic instability (14%), wage inflation (13%), and legislative/regulatory burden (13%).

A separate survey from the Irish Small and Medium Enterprises association strikes a similarly optimistic note.

Its members say they have seen improvements across ten out of 12 indicators tracked by ISME.

ISME also expects recruitment to be strong this year and is predicting up to 60,000 new jobs will be created by small and medium-sized businesses.