UK firms 'in optimistic mood'

The east was the only region expecting a downturn

Prospects for businesses in England are looking up, according to a survey into regional economies.

Companies in eight out of nine English regions are predicting an increase in business, research by the CBI and the nine Regional Development Agencies (RDAs) found.

The survey, which questioned 3,000 firms from all sectors in the nine English RDAs, showed that confidence was strongest in the south west and the Midlands.

Only in the east did a majority of firms think the situation would get worse.

The south east and London were the only regions to report a fall in domestic orders.

Employment hope

All regions predicted the domestic market would improve in the next 12 months.

It remains to be seen whether the improvement in export conditions will materialise in the near future

Doug Godden, CBI

But export orders continued to fall, with London particularly badly hit.

However, companies in all regions forecast no significant decline in exports over the next year.

The survey also suggested that firms expect employment to pick up, with a majority of those questioned planning to take on staff in the next year.

Most new jobs were expected to be created in the north east, west midlands and south west with the least set to be in London, the south east and east of England.

"This survey emphasises the need for regional development agencies to deliver long-term, sustainable and diverse economies which can withstand the impact of global uncertainties," said Graham Hall, chairman of the English RDAs.

The CBI added that the conditions being faced by exporters remained a cause for concern.

"It remains to be seen whether the improvement in export conditions will materialise in the near future," said Doug Godden, CBI head of economic analysis.

"We have had one too many false dawns in recent months."