In its the latest business confidence index survey, which tracked from July until December, firms’ expectations for sales, orders and profits over the coming six months reached 16 per cent, up from -3 per cent at the end of June.
This is also a significant rise from the record low of -32 per cent for the same period last year, and is the highest balance since December 2007.
The balance of firms anticipating an upturn in sales has climbed to 21 per cent, up from just 1 per cent six months ago. A further 41 per cent are expecting an improvement and 20 per cent braced for a decline.
Six per cent of companies expected better profits over the next six months, up from -16 per cent in June, while 18 per cent expect to be able to boost investment over the next six months. However, 23 per cent expect they will need to make cuts.
There is also a concern amongst many firms that weak domestic demand could hinder growth, with more than half, 56 per cent, of firms citing this as a threat.
Lloyds TSB Commercial managing director John Maltby says: “There are still many question marks over the likely strength and shape of the recovery. But confidence is the bedrock of every economy, and with businesses now more optimistic about their prospects for the year ahead, there is good reason to be hopeful that the upturn will gather pace early in 2010.”
But Maltby adds: “That’s not to say that it will be a smooth ride. The next six months will be critical, and the path to recovery will depend on businesses’ approach to investing, recruiting and exploring new markets.”