IRISH BUSINESSES sending their products overseas saw the export sector strengthen in the fourth quarter of 2010, according to a survey of Irish business executives.

The KBC/Chartered Accountants Ireland business sentiment survey indicated that economic output seemed to continue to grow in the final three months of the year, but that the slump in domestic demand continued.

Managers in the manufacturing, business services and food sectors – those most reliant on overseas demand for their goods and services, with the domestic market failing to recover just yet – were broadly optimistic about the prospects for the first quarter of 2011, with 40% of manufacturers being optimistic for that quarter compared a pessimism level of 15%.

The Irish Times adds that executives from businesses focussing on domestic consumer markets were much less optimistic, however, with 20% of those firms being optimistic about Q1 compared to the 42% who were pessimistic about the sector.

Even more worried were executives in construction, where 47% were pessimistic – compared to just 9% who had high hopes for the next three months.

The recovery of the domestic market is considered a fundamental indication of a firmer economic recovery, with GDP and GNP both veering into positive territory for the third quarter of 2010 almost solely on the basis of exports.

The survey – which questioned 360 senior managers, including CEOs and directors earlier this month – also found that a majority (61%) thought the IMF-EU bailout deal would improve the country’s prospects, compared to 16% who felt it would damage Ireland’s chances.

The Irish Independent adds that membership of the euro was also supported by a majority, albeit a slimmer one, with about 30% thinking Ireland’s inability to devalue an independent currency had done it harm.

Austin Hughes of KBC said about a third of Irish companies were on their way to recovery, while another third of companies thought they were likely to see their business environment get worse in 2011.