Irish business owners are the most optimistic in Europe, according to a survey published yesterday.

The survey also found that business owners in the Republic are the second most optimistic globally, outdone only by their counterparts in India.

The 2006 Grant Thornton International Business Owners Survey, in its fourth year, involved more than 7,000 owners of medium-sized businesses in 30 countries and was carried out in autumn 2005.

The survey measured the percentage balance between positive and negative responses to queries. It found an 84 per cent positive balance of responses from Irish business owners asked about the coming year, compared to 79 per cent last year.

The next ranking country in Europe was the Netherlands, where 63 per cent of business owners were, on balance, positive about the coming year. The global average arrived at by the survey was 32 per cent.

Of those surveyed in Ireland, a net percentage of 77 per cent expected an increase in turnover this year, up 14 per cent on the previous year; 32 per cent expected increased employment, up 9 per cent on last year, and 30 per cent expected an increase in selling prices, up 6 per cent on last year.

Other key indicators, while still positive, were down on 2005. Expectation of increased profitability was down 7 per cent, to 52 per cent, while 48 per cent expected to invest in new plant and machinery, down 10 per cent.

Commenting on the findings Gearoid Costelloe, partner with Grant Thornton, said: "The Irish economy still continues to confound even the most benign predictions of a slowdown. The recent budget helped the situation by not interfering in the two key areas of the economy at present: construction and retail, and the hope is that the predicted and inevitable slow down will come as the new public sector capital programme gains in pace over the coming years.

"There is still a lot of catching up to do with infrastructure in our economy and with proper balancing of the public and private investment programmes, construction will continue to be the backbone of employment growth."

He said that while a lot of commentators had concerns about the private debt burden, this was partly offset by the quality of the asset base that many borrowers are accumulating, and the hope of continued low interest rates.

For the third year in a row, the survey found that business owners in India were the most optimistic of all those surveyed. The survey found that on balance, 93 per cent of Indian businessmen were optimistic about the coming year, up from 88 per cent last year.

South Africa, which came third, had a score of 80 per cent, down four percentage points. For the first time the survey included China, where the confidence score was found to be 77 per cent, giving it a fourth place ranking globally.

In the US, the confidence score fell by nearly half, to 32 per cent from 62 per cent, making the US rank 17th in the survey. In the UK, the fall was to just 8 per cent, from 46 per cent, making the UK rank 23rd in the survey.

Germany, which had recorded a negative score up to last year, saw a positive balance of 41 per cent while Japan, still at a negative minus 14 per cent, saw the level of pessimism ease from a level of minus 27 per cent in the previous survey.

Overall, the survey showed that businesses in 26 out of 30 countries were mostly optimistic about their economy's performance in the coming year.

However the US, Canada, the UK, France and Italy all scored reduced levels of confidence.