Conditions in Ireland's employment market are improving, a new report has revealed.

According to KBC Bank and Chartered Accountants, there was an increase in new hiring activity during the first three months of 2011.

Figures also showed that this coincided with a drop in the number of redundancies across the country.

As a result, KBC is optimistic that a net increase in employment will be seen in Ireland during the next few months.

Austin Hughes, chief economist at the bank, acknowledged that conditions in the Irish job market are still "fairly weak".

However, he said the latest figures suggest that the "worst news on jobs is behind us".

Despite this optimism, the report highlighted a number of causes for concern among businesses in Ireland.

For instance, nearly three-quarters said they believe the recent increase in interest rates across Europe will negatively affect their operations.

Last week, Michael Dowling from the Irish Mortgage Advisors Federation told the Irish Examiner that a further two interest rate hikes could be seen before the end of the year.

Posted by Sarah Dixon