Three in five (58%) firms overall - on both sides of the Irish border - are reporting a drop in turnover in the second quarter of 2009.
However, consistent trends for business outcomes and expectations for turnover, profitability and employment since the start of 2009 suggest that businesses in Ireland and Northern Ireland are operating at the 'bottom of a steep economic downturn'.
That's according to the latest InterTradeIreland Quarterly Business Monitor, the biggest business survey on the island.
The Monitor also confirmed that Southern companies are continuing to suffer more than Northern Ireland companies, reporting a drop in turnover of 72% compared to 44%.
The sectors worst affected are manufacturing, construction and the hospitality industry.
Director of Strategy, Aidan Gough, said: "The emerging picture points to a U-shaped recession - the question now is how wide the trough will be?
"According to our survey results, the answer may lie in the actions companies have been taking to restore lost competitiveness," he said today.
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"Almost half of companies (49%) have revised targets downwards, 56% have renegotiated professional or supplier costs, and 58% have sought to reduce staff costs in the last quarter," he continued.
In addition, he noted that just over two in five businesses (41%) overall have reduced their prices - a much higher proportion in the South (60%) than in Northern Ireland (22%).
"Restoring competitiveness is the biggest challenge facing firms and they are currently seeking to reduce costs across the board in order to be able to take advantage of any upswing," he insisted.
However, there's a gap between the two parts of Ireland: "A marked differential between business performance North and South remains," continued Mr Gough.
"In the South, 65% of companies have remained profitable during the downturn, while the figure for the North is 82%.
"There is no doubt that the depth and strength of the recession is more marked in Ireland than Northern Ireland," he said.
The survey, involving telephone interviews with 1,000 owner/managers North and South was undertaken last month by Millward Brown Ulster and covers the period April to June 2009.
It reveals that pressure on business remains intense with almost half (46%) experiencing a declining customer base and seven out of ten having been asked by customers either to give longer payment terms, lower prices or discounts.
Cash flow and reduced demand continue to be the biggest issues that companies face, however there are brighter signs concerning access to finance with 70% of companies – 10% more than the last survey - successfully applying for a business loan or credit.
In conclusion, the executive said: "Businesses are not yet seeing any signs of a recovery - but they are still positive, with almost three-quarters optimistic about their performance over the next three years."
Added Mr Gough: "This picture continues to be true in the service sectors but also, more surprisingly, in the construction sector.
"The results of our next survey, in November, may provide more data on what shape recovery will take."
(BMcC/KMcA)
