Industrial production in Ireland has risen by 7.9% in the month and 10.9% in the year, according to Eurostat figures.
IBEC said the data demonstrated that recovery is "firmly taking hold".
The EU statistics agency figures show that Ireland posted the strongest monthly improvement in industrial production in the EU in September 2010.
IBEC Director General Danny McCoy said: "Part of the reason why bond yields have risen so sharply is that markets have been doubting Ireland’s growth prospects. Latest industrial production data clearly show that the recovery is on track.
"Ireland continues to have a resilient, diverse and dynamic enterprise base on which to build future growth. In response to the recession, Irish companies and their employees moved quickly and with a flexibility unmatched in any other country.
"We now have evidence that this is working and business is gaining the necessary momentum to drive growth. We have a lot more to do to restore our economic fortunes, but we are on the right path."