One in four companies in Ireland will increase investment in their businesses as a result of the positive vote in the referendum on the Belfast Agreement, a survey of top companies North and South has found.

The survey also found that 23 per cent of the 143 companies surveyed felt there would be an increase in employment as a result of the referendum. They reported plans for an additional 7,000 jobs.

Overall, the survey by the PA Consulting Group, found that businesses on both sides of the Border believed a more positive business environment would develop as a result of the "Yes" vote.

"The referendum result has released a wave of optimism throughout the business community on the island," said Dr Michael Maguire, of PA Consulting.

However, the companies expressed the view that a Northern Assembly which failed to deliver on political stability could potentially undermine the confidence engendered by the May 22nd vote. "There may be no effect in the short term as business waits to see the outcome of the Assembly result," said one respondent.

The survey, which involved telephone interviews with senior executives from 81 companies in the Republic and 62 in Northern Ireland, took place on May 25th and 26th. It involved top companies from a wide range of industrial sectors.

Companies were optimistic about future prospects for the economies in both jurisdictions, with 88 per cent feeling optimistic about the Northern Ireland economy and 75 per cent with the economy in the Republic.

A wide range of business benefits were identified as possible outcomes of the more stable political environment. The main benefits identified were:

potential for increased investment;

improved reputation for the island of Ireland;

increased tourism;

improved workforce morale;

economic aid from the US and/or the EU;

economic stability;

new market opportunities;

harmonisation of tax arrangements;

increased labour mobility;

increased cross-Border co-operation;

confidence to invest in Northern Ireland;

physical safety in doing business in Northern Ireland;

more incentive for people to stay.

Companies in Northern Ireland (71 per cent) felt it was more likely to have a positive impact on their business than did their counterparts in the Republic (59 per cent).

The majority of companies (70 per cent) said the referendum result would have no impact on their investment plans. However, one quarter said it would cause them to increase investment. The companies indicated that an additional £70 million would be invested by companies based in the Republic and £17 million by companies in the North. Short-term investment was more forthcoming in the construction and utilities sectors, the survey found.

Of the companies surveyed, 27 per cent did no cross-Border trade, with 55 per cent in the North and 46 per cent in the Republic doing less than £1 million in cross-Border trade a year. However, 42 per cent of companies believed there would be some increase in cross-Border trade as a consequence of the referendum. "Northern Ireland is now a more friendly place to do business," said a respondent from a construction company in the Republic.

Nearly half of Northern companies (46 per cent) felt cross-Border bodies would be "very important" or "important" in improving business prospects, compared with 40 per cent in the Republic. A further 11 per cent in the North and 6 per cent in the Republic, felt it was too early to say.

However, in the North, 34 per cent of respondents said cross-Border bodies were neither important or unimportant, a response which was given by 38 per cent of companies in the Republic.

Under the terms of the Belfast Agreement, North-South bodies are to be established with responsibility for developments in a number of areas. These are: agriculture (animal and plant health); education (teacher qualifications and exchanges); transport (strategic planning); environment (environmental protection, pollution, water quality and waste management); inland waterways; social security (entitlements of cross-Border workers and fraud control); inland fisheries; aquaculture and marine matters; health (accident and emergency and other related cross-Border issues); urban and rural development; and relevant EU programmes.

Cross-Border bodies with responsibility for other areas may be considered by the shadow North-South council to be set up under the agreement.

On spending priorities for government and EU investment, the majority of companies on both sides of the Border felt the priority should be infrastructure investment (85 per cent), followed by tax incentives in the North and skills training in the Republic.

Some of the companies contacted declined to participate, believing it more important to await the results of the elections to the Assembly, Dr Maguire said.

"The make-up of this body will play a significant role in shaping the future political, economic and social direction of Northern Ireland and the concept of cross-Border institutions."