Software firms are maintaining a bullish stance on jobs and revenues despite the economic slowdown, according to a new survey by the Irish Software Association.

But while the association said the poll of 300 firms provided indications that the "technology recession" may have bottomed out,about 17 per cent of companies surveyed said they planned to cut jobs this year.

The association said three in four software companies were forecasting higher revenues this year, while 56 per cent said they would increase staff levels.

With sales in the business representing 11.6 per cent of Gross Domestic Product and more than 10 per cent of exports, conditions in the industry are crucial to the State's overall economic performance.

The chairman of the association, Mr Billy Huggard, said the results of the survey were "highly encouraging" although the survey noted that "flat" growth was expected in the first three months of the year.

Projecting "steady incremental growth" in the April-June period, the association said confidence in the business was being restored, but at a slow place.

"Reality and normality is returning," it said. But while the market appeared more upbeat, this had not translated into "actual budget spend".

The association added: "Quite a few respondents said that there was an improvement in the US market and that there was signs of budgets being released. Customer queries and orders are up. In addition, projects which were stalled in 2001 are back on track."

Reflecting the downturn last year, the survey said about 29 per cent of software companies had reduced jobs last year. Some 61 per cent hired additional staff during the year, the association said.