The survey signals that hiring is now at its strongest level since mid-2007.
Despite increased activity and hiring, company confidence was marginally softer, KBC bank and Chartered Accountants Ireland said in a report published yesterday.
“The marginal decline in the business sentiment index may be disappointing but it isn’t at all surprising given the dramatic improvement reported in the second half of last year,” said KBC economist Austin Hughes.
“The survey is designed to capture changes in business conditions. So, these results point to step gains of late rather than any seismic change in activity levels. In turn, this reflects the reality of a recovery that is healthy but far from a return to the boom.”
Firms focused on the domestic market still appeared concerned about the future.
Companies complained about lack of pricing power, with 70pc reporting flat or falling prices.
“Irish companies are reporting steady rather than spectacular increases in output in mid-2014 but this should be seen as the continuation of very healthy growth rather than any pointer to weaker conditions,” said Chartered Accountants Ireland chief executive Pat Costello.
“The business sector was relatively early to see and signal the emerging upswing that is only now being captured in indicators like gross domestic product,” he added.
Mr Costello said concerns among domestic companies probably “reflects a still early and uneven pick-up in domestic spending”.
Only one-in-three firms reported rising costs in the past three months and an even smaller number said they were increasing the prices of the goods and services they sell. That chimes with similar reports across the euro zone where inflation is currently running at just 0.4pc.
“With 70pc of companies reporting flat or falling selling prices, it seems a lack of pricing power is a key feature of the business environment. In turn, this means a low inflation environment is now deeply entrenched,” Mr Costello said.
The business sentiment survey reflects the view of chartered accountants working in senior positions in Irish companies. The summer survey was conducted between July 14-17 and the results presented are based on 397 completed responses.
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