Businesses in the North are worried about the strength of the pound and how the Northern Ireland Executive will perform in the year ahead but overall the majority of local firms say they are optimistic heading into 2016, according to the results of a business survey.

More than 300 companies took part in the most recent Northern Ireland Chamber of Commerce and Industry survey and two thirds of these firms said they expect their businesses to grow this year.

But around one in six were not quite so positive and warned that they expect their businesses to contract.

The survey, which covered the last quarter of 2015, was carried out with business advisers BDO and also highlights that competition remains an ongoing concern for the majority of local companies together with skills shortages and the impact of the proposed public spending cuts in Northern Ireland.

Christopher Morrow, policy manager at the NI Chamber of Commerce, said while there is currently a strong sense of optimism in the air among the business community there are also challenges that need to be urgently addressed.

“Competition has been constantly cited as a key issue for members alongside rising costs. Northern Ireland businesses feel that they cannot be as competitive as their counterparts in other parts of the world with our manufacturers in particular suffering due to increasing costs, issues around exchange rates and global economic conditions.

“Members from sectors such as tourism and hospitality are also concerned about the introduction of the national living wage and its proposed timetable, with the view that the policy has not been well enough thought through and potential impacts not adequately assessed,” Mr Morrow added.

He also said that the majority of the organisation’s members felt that long periods of political instability had held both international and local business investment back last year.

However there was a sense that the political consensus reached at the close of 2015 would deliver a boost for the economy this year and give the business community a chance to work with political leaders.

Mr Morrow said: “Businesses finally have an opportunity to contribute to the review of business rates – an important policy tool which requires careful and strategic consideration. Along with the new Department of the Economy, which will bring skills and the economy closer together, a new Programme for Government and an action plan to boost exports, 2016 can provide the foundations required for businesses to grow,” he said.

The results of the chamber’s latest survey showed that by quarter four most key balances remained positive which suggested some growth in the local economy and that the majority showed increases coming off a relatively poor performance in quarter three.

Only the manufacturing sector domestic orders balance became negative during quarter four while in the services sector the balances around employment also fell.