Happy new year expected as confidence soars

The research, conducted by Bank of Scotland Business Banking, found that the surge in confidence among small firms has led to 38 per cent planning to invest in their business and 34 per cent considering taking on new staff over the next year.

The feel-good factor also extended to the economy, with confidence rising by a massive 47 per cent since February, when fears over the war in Iraq and the global downturn were at their peak.

Over half of those quizzed said that they were now ‘quite optimistic’ about the state of the UK economy over the next 12 months, with just seven per cent saying that they weren’t confident at all.

Businesses in Yorkshire were the most confident about the future, with 51 per cent expecting a bright 2004.

Firms in Birmingham were the least optimistic, with just 32 per cent thinking they will have a good year.

Across the various sectors questioned, companies working in construction and property were the most confident about the next 12 months – 65 per cent and 64 per cent respectively.

Meanwhile, only half of retailers and wholesalers were optimistic.

The growing feel-good factor amongst small firms will fuel hopes that the UK economy is emerging from the economic downturn of the past year and will make particularly good reading for chancellor Gordon Brown, who has predicted strong growth in 2004.

However, the Bank of Scotland survey revealed that life is not totally plain sailing for entrepreneurs, with 69 per cent claiming that it has become more difficult to run their business over the last five years.

Tom Abraham, managing director of Bank of Scotland Business Banking, said: “This research reveals nothing short of a quantum leap in the confidence owner-managers have both in their own business and the wider economy.

“With confidence, future investment and recruitment figures all registering significant rises, the vast majority of small businesses appear to be well placed to drive forward in 2004,” he said.