The number of small businesses has increased by more than 50 per cent in the last 10 years, while small businesses now account for 97 per cent of all enterprises, according to an official study to be published next Tuesday.

The Irish Times has seen a copy of the study, commissioned by the Small Business Forum and conducted by DKM Consultants.

The study shows that the number of small businesses rose from 160,000 in 1995 to 250,000 at present. The number of small businesses rose to 220,000 between 1995 and 2000, while one third of the 30,000 small businesses created between 2000 and 2005 were created in the construction sector.

Almost 777,000 people were employed in the sector last year, up from 435,000 in 1995. The sector now accounts one in every two workers in the private non-agricultural sector.

Employment growth was strongest between 1995 and 2000, and job creation amongst small industrial firms has been falling since 2000.

Some 26 per cent of all small businesses are in construction, which now accounts for the largest share of small businesses.

Wholesale and retail organisations are the second largest segment, accounting for 17 per cent, down from 26 per cent in 1995. Business services was the third-largest segment, at 13.5 per cent.

Small businesses contributed a total of €25 billion to the economy in 2003 and accounted for approximately 37 per cent of income taxes and 11 per cent of corporation taxes paid to the Exchequer, it estimates.

The study calls on the Central Statistics Office to compile a business register to monitor the future performance and for its findings to be updated and published in an annual Small Business report. Speaking at the Chambers Ireland National Business Forum last Thursday, Joe Macri, managing director, Microsoft Ireland,and chairman of the Small Business Forum, a body set up by the Minister for Enterprise, Trade and Employment Micheál Martin last year to assess the issues facing small to medium-sized business, said that increasing productivity in the small business sector would be crucial to the economy.

"In a marketplace where rising costs are challenging all small businesses and with increased international competition across all sectors, there is a need to look at policies that will help support small businesses to grow, become more efficient and productive," Mr Macri said.

The forum will present its report to Mr Martin next week.