Confidence among UK firms is at its highest level for 14 months, new research reveals.
According to Lloyds TSB, 60% of businesses expected economic prospects to improve over the coming months, up from 46% in February. Companies were their most optimistic since January 2004.
As a result, three-fifths of firms predicted an upsurge in trading during the next year. Some 57% predicted the same last month.
Despite some recent surveys indicating otherwise, manufacturers were found to be the most confident about the UK's economic outlook.
Investment in the sector grew by 3.3% in 2004, the report said, which implied companies were adding to or maintaining capacity in expectation of future growth.
Trevor Williams, from Lloyds TSB Financial Markets, said: "These results are supported by recent revisions to official industrial production data. Companies seem to have made the necessary adjustment to current tough trading conditions and look leaner, fitter and more cash rich than in 2004.
"High expectations for their business are likely to encourage further investment spending, which could take up some of the slack in the UK economy caused by slower consumer spending growth."
Northern firms were most optimistic about the future, while companies in the Midlands showed the most pessimism.
