The key highlights emerging from the latest BDO Optimism Index show that the number of large companies reporting higher activity levels in the first quarter of 2016 has almost doubled, but smaller companies stagnated and exporters hurt.

The level of mid-size to large companies reporting a rise in activity jumped to 65% from 38% in Q1 2015, the biggest increase since the survey began. The number of micro companies reporting higher levels of business activity fell by one point, the first decrease since 2012, while activity levels for transitional companies rose just 1%.

According to BDO, the divergence between larger and smaller companies can be partly explained by access to funding.

Elsewhere, the proportion of exporters reporting increased business activity fell by the most since 2011. Some 47% of exporters said they had higher activity levels in the period, compared with 55% who said the same thing last year.

This decline came amid volatility in global markets at the start of 2016 and concerns over Brexit, crimping investment and hurting demand. However, exporters were bullish about their prospects in the second quarter of the year, with 55% predicting higher levels of activity, a 1% increase from the same period in 2015.

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About 69% of larger businesses forecast increased activity in Q2 this year, compared with 48% last year. However, again, micro and smaller businesses were far less optimistic, as the number of companies predicting an increase in activity fell by 1% on both counts.

The proportion of companies saying operating profit fell in the first quarter was 18%. In Dublin, 36% of companies reported a rise in operating profit, while 37% of companies outside the capital agreed, a sign that the regions are now also experiencing a recovery.

First-quarter employment levels remained broadly unchanged in the period when compared with a year earlier. However, only 7% of business said they cut jobs, the lowest level since 2011.

Overall optimism continues to improve, rising to 66.7, a 5% increase over the past year. While general optimism has increased the growth has begun to slow, from 21% over the past three years to just 5% for the year.

Michael Costello of BDO said: “The index shows that mid-sized and larger businesses are pulling away from smaller businesses in terms of anticipated growth and activity. The divergence between the larger and smaller business can be partly explained by funding for SMEs being harder to access and the increased exposure to personal financial issues.

“Exporters were hurt by the global market uncertainty and fears over Brexit in the first quarter, but were bullish about their second-quarter prospects as the market turmoil subsided.

"Prices and profits across all sectors have stabilised, with the index showing the lowest level of businesses anticipating price decreases since the survey began.”