Smaller companies are expected to create up to 25,000 jobs next year despite ongoing challenges including Brexit, according to the Small Firms Association (SFA).

SFA Chair Sue O’Neill said 2017 has been "a challenging but successful year for small businesses.

"Brexit, wage inflation and increasing business costs are the main obstacles for small businesses in Ireland. However, as the year draws to a close, nearly two thirds of small firms feel that the business environment is improving.

"Domestic economic growth in 2018 is likely to be close to 4% and our members see this as the biggest opportunity for their business in the coming year.

"71% of SFA member companies plan to take on additional staff and we estimate that together small businesses will create 25,000 jobs in 2018.

"These jobs will be in a wide variety of sectors, giving a boost to villages, towns and cities across Ireland."

However, Ms O’Neill said more Government support will be needed to realise the planned job creation.

She said: "Creating a strategy for growth for small businesses with special focus on tax competitiveness and the cost of doing business especially in light of Brexit should be the top priority in the coming year.

"By creating a real pro-growth tax system and making sure that work always pays, employees, small businesses and society as a whole will be better off."