More than half of business leaders said they are now more pessimistic about the economy than they were three months ago, in a survey carried out by the Institute of Directors (IoD).

Just 16% of respondents said they were more optimistic.

"Business leaders are facing turbulent times, as business confidence plummeted in the first quarter of the year, no doubt impacted in large measure by the invasion of Ukraine by Russia and the many consequences of that war," said Thora Mackey, Chief Operating Officer of the IoD.

"The humanitarian impact has been immense, of course, but energy costs and resources, and supply chain issues, have been significant, as has wider geopolitical and economic instability."

"Uncertainty is a key factor at play here."

A little over a third of those polled said they think the Government should use the Covid contingency fund to assist businesses in dealing with inflation and supply chain issues.

Half, however, thought that was not a good idea.

The latest Director Sentiment Monitor for the first quarter also found that three out of every five of the more than 300 directors and business leaders who responded felt the Government should review direct taxation to boost disposable income levels in the face of surging inflation.

But when asked whether there is a limit to the measures that the Government can take in relation to inflation and supply chain issues, 92% expressed the view that there is.

A little over a third said the Government's performance when it came to instilling business confidence had been positive.

"While a majority of business leaders feel the Government might look at initiatives on direct taxation to add impetus to the economy, they are also realistic in that an overwhelming majority of 92% believes there is a limit to measures the Government can take in relation to inflation and supply chain issues given that Ireland is a small open economy," said Thora Mackey.

"Business leaders will need to maintain a steady hand in navigating their businesses through this unsettled time."