Business volumes have increased
Business volumes have increased in the last three months, sparking confidence that conditions will improve among Irish companies.
A new business sentiment poll also showed that employment levels in the sector improved modestly for the first time since 2007.
The KBC Bank Ireland and Chartered Accountants Ireland survey found businesses are confident conditions will improve further in the third quarter.
A deal struck by Taoiseach Enda Kenny at the end of June with European leaders to separate Ireland's bank and sovereign debt may have boosted business outlook, it added.
KBC chief economist Austin Hughes said the expected improved conditions are a result of fewer companies reporting weakness in their business volumes.
He said: "The sort of turnaround we are seeing is unusual and is highly influenced by the nature and intensity of the downturn in the Irish economy in recent years.
"A gradual easing in the negative pressures weighing on activity is a critically important development in restoring the Irish economy to growth.
"In this regard, tentative signs of a bottoming-out in conditions facing businesses focused on consumer spending and construction are particularly encouraging."
Mr Hughes added that signs of the first gain in employment in almost five years were encouraging - albeit modest. But he warned that company bosses are still being forced to make layoffs and may continue to be cautious in their hiring.
"That said, signs of even a tentative pick-up in employment hint at a potentially major change in Irish economic conditions," he said.