Businesses have seen their output rise
Business confidence has reached its highest level in four years, according to a survey of UK companies.
The Business Trends survey from accountants BDO shows both confidence and output back at pre-recession levels.
However, the report warns that a "significant increase" in investment in the private sector is needed to sustain the recovery.
It said that business optimism could be "short-lived" without the investment.
The rise in output was put down to companies deciding to re-stock after letting their stock levels run down during the recession.
This provides only short-term support for economic growth, BDO warned.
It added that the investment needed to ensure longer-term growth was being hampered by uncertainty over plans for the public finances following next month's general election.
"The economy is showing signs of improvement, but the main political parties risk frittering this opportunity away if they don't provide clarity for businesses now," said Alex White, a partner at BDO.
"Political parties are keeping businesses in the dark on the substantive impact of their policies... uncertainty created here is an enemy to investment."
BDO's survey covered 11,000 companies from a range of industries.
Meanwhile a survey of chief financial officers (CFOs) at UK companies has also indicated a rebound in confidence.
The survey, by business services company Deloitte, shows that business appetite for financial risk is at its highest level since early 2008.
"CFOs have significantly reduced the level of balance sheet financial risk over the past year, but this process seems to be drawing to a close," explained Ian Stewart, Deloitte's chief economist.
"This recovery in corporate risk appetite mirrors the behaviour of financial markets where risky assets, such as equities, have outperformed safe assets such as gilts and cash."