A quarter of Irish firms claim they are experiencing strong growth, and a third expect to see sales increase in the next six months, the latest all-island business monitor from InterTradeIreland shows.

Overall, 91% of businesses on the island of Ireland say they are stable or growing despite economic and geopolitical headwinds, with 71% having passed on price increases to customers due to inflation and rising costs.

The overwhelming majority of businesses that were either stable (48%) or growing (43%) in Q4, which represents a rapid improvement from Q3 when 78% were either stable (44%) or growing (34%). Just 8% were in decline, down from 21% in Q3.

Martin Robinson, director of strategy at InterTradeIreland, urged caution before "rolling out the red carpet to welcome a full-throttle economic recovery," arguing that results needed to remain strong for the next two quarters before sustained uplift could be identified.

Businesses in both Ireland and Northern Ireland with export sales are present experiencing the highest rate of expansion, with half of such firms enjoying growth.

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Some 46% of cross-border trading firms are growing compared to 43% of non-cross-border trading companies, and 50% of export trading businesses are growing against 41% of non-exporters.

Cross-border traders also continue to have higher profit margins than their peers, and a third of businesses that trade cross-border (33%) said gains are in excess of 10%, compared to just over a quarter of non-exporters (26%).

Overall, 30% increased their sales and 52% saw stable sales in Q4, with a third (34%) expecting sales to increase and half (50%) believing they will remain static in the coming six months. Just 8% expect sales to decline, down from 14% in Q4.

“Across all sectors, there’s a real sense of businesses just putting their head down and getting on with it. It’s important to note that despite the cost challenges most are still profitable," Robinson said.

"Manufacturing is more upbeat after recent price shocks - there could be a sense that most of the bad news is already priced in. We would expect the hospitality sector to have a seasonal boost in the last quarter of the year; although fewer businesses in this sector are in growth mode relative to other sectors.”

High input costs of both energy (87%) and other overheads (75%) remain the dominant issues for Irish business, well ahead of recruiting difficulties (25%), lack of appropriate skills (23%), and Brexit (16%).

Difficulty accessing skills remains an issue for one in five, while 82% of firms say they have largely adapted or remain unaffected by trading conditions post-Brexit.

Central Statistics Office (CSO) figures show annual goods exports from Ireland to Northern Ireland have hit €4.9bn.