Optimism among UK firms seen increasing

OPTIMISM among medium- sized British companies over the business outlook has strengthened to its highest level in six years, while two out of three businesses intend to invest in a large capital asset in the first quarter.

A survey by 3i, the venture capital group, of 1,000 companies suggests that the pace of economic recovery is accelerating, with confidence in larger profits and turnover at a five-year high. Investment intentions, a leading indicator of durable recovery, are continuing to rise.

Overall business confidence, as measured by 3i's 'enterprise barometer', reached 142, the highest reading since January 1988 when the surveys began.

Ewen Macpherson, chief executive, said: 'Confidence among the medium-sized business sector has been growing steadily over four successive quarters. These companies reflect the pace of economic activity and their growing confidence is enormously encouraging.'

Similar attitudesemerge from a study by Lombard Business Finance of 450 businesses in the leading industrial sectors. It suggests that investment intentions have risen 10 per cent on the final quarter of last year. Almost two- thirds of companies polled expect to invest in at least one large capital asset in the first quarter. The survey also showed greater overall optimism in the economy and over investment plans.