Although the building trade continues to be hardest hit, overall economic activity is increasing.

Ulster Bank has reported that over one in four firms have seen a rise in business activity in August, a figure not seen since October 2007.

The bank's authoritative Purchase Managers Index survey found 30% of local companies reported a rise in new incoming business, the largest proportion for two years.

However, NI remains the only UK region still waiting to return to growth said Ulster Bank Economist Richard Ramsey.

The monthly Purchase Managers Index measures what businesses think is happening to the economy and tracks new orders and stock levels.

Mr Ramsey said the most noticeable difference with the overall UK economy was in the services industry, excluding retail.

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"The services industry is currently the strongest performing sector, whereas in NI service sector firms reported the sharpest fall in output of all the sectors," he said.

According to the survey, staffing levels in the Northern Ireland private sector were down for an 18th successive month, but Mr Ramsey said the pace of job losses was continuing to ease.

"Local firms reported a more moderate decline in employment levels relative to their UK counterparts for the third month in a row," he said.

"NI's construction sector continues to bear the brunt of the ongoing job losses."

Among the survey's main findings conclusions were that business activity and new work was still down but reduced at a slower pace; staffing levels were reduced for the 18th successive month - but the rate of job losses continued to slow - the latest decline was the weakest since April 2008.

The news comes just weeks after other positive news on foot of Ulster Bank's equally authoritative Quarterly Economic Review.

Richard Ramsey said in August that "key indicators suggest the worst of the economic gloom is behind us and that the most serious phase of the house-building crisis has passed".

See: Ulster Bank 'Says Recession Over'

(BMcC/GK)