Businesses in the UK are becoming increasingly confident about sales and profitability, driven by foreign markets, according to research by Lloyds TSB Commercial.
The organisation's latest Business in Britain Confidence Index shows a net positive balance of 18% for June; the highest since 2007.
Growing confidence has been mainly driven by expectations surrounding foreign sales, with a positive balance of 42% of businesses predicting an increase in this area.
This has also led to manufacturing becoming the sector feeling the most confident, at 33%, with financial services recording 21%.
However, the overall confidence balance still remains short of the long term survey average of 22% which the bank has attributed to lingering doubts around domestic growth.
John Maltby, managing director of Lloyds TSB Commercial, says: "Concerns about home-grown demand are unsurprisingly weighing on the minds of business owners whose success depends on domestic markets.
"As long as businesses harbour doubts about the economic climate, they will hold back on investment spend and, while there is enough momentum behind the recovery to prevent it faltering, it is likely to be a long haul."
Unsurprisingly, considering the emphasis put on cuts by the coalition Government, the index shows the public sector has the lowest confidence levels, at -1%, with hospitality and leisure, construction and healthcare also fairing poorly.
London and the South East emerge as the regions with the brightest outlook, both at 25%, while the West Midlands and Wales come out worst at 10% and 11% respectively.
Trevor Williams, chief economist for Wholesale Markets at Lloyds TSB Commercial, comments: "The UK is on the road to recovery, led by improvements in business confidence. Export sales, in particular, have risen strongly, helped by the rebound in global demand as well as the sustained fall in the pound.
"The question now is how this renewed confidence will shape the recovery. History tells us emerging from recession is not always a smooth ride, and we should not expect the coming months to be easy.
"However, if confidence holds up, we should avoid the double dip that many have feared."
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