The Small Firms Association's (SFA) Autumn Business Sentiment Survey shows that although sentiment is somewhat more positive than during the second quarter of 2009, 67% of SMEs rate the overall business environment at present as 'poor' or 'very poor'.
Just 50% of companies say they will maintain current employment levels, with others anticipating layoffs in the coming months.
The research was conducted in August and included 684 businesses from the manufacturing, distribution, retail and service sectors in Ireland. The mood in the distribution industry was particularly downbeat, with 78% saying they had a negative view of the current business climate.
SFA Director Patricia Callan said that overall survey results show that small business owner-managers are more positive for the second quarter in a row, but that many remain under serious pressure.
Compared with the first half of 2009, fewer small and medium-sized enterprises (SMEs) now fear further decreases in turnover, with around half expecting profits to take another hit in the next three months.
Callan called on the Irish government to take decisive action in the coming months to develop a business environment conducive to SME growth and expansion. She said the national budget, due to be unveiled in December, will be critical to restoring confidence amongst investors and consumers. This, she added, will require "harsh decisions" to be implemented.
"If there is not a credible plan in place for addressing the real deficit, then confidence, on which growth in the economy so depends, will not return," she said.
The SFA wants the government to provide a comprehensive economic stimulus package and introduce measures to improve access to finance for small businesses. Ireland's mounting national debt has curtailed the government from boosting the economy with the kind of stimulus measures implemented in other European countries.
Forecasts for the European economy as a whole have sounded a more optimistic note in recent weeks, with experts predicting a return to moderate growth by the end of the year. However, unemployment continues to creep upwards across the EU.
