The Confederation of British Industry (CBI) survey shows that orders are rising for the first time in three years, while export orders are positive for the first time in seven.
In its survey of 775 employers, 30 per cent of firms reported demand increasing in the last three months, while 29 per cent saw them fall. The balance of one per cent compares with minus 25 per cent in October and was the first positive result since April 2001.
The brighter conditions helped to bolster confidence amongst the respondents, who registered a positive optimism balance of 10 per cent, compared with minus 13 per cent in the previous survey.
But the CBI also reported that output was flat over the quarter and lagged behind that of bigger companies in the sector, although many SMEs expected production to pick up in coming months.
Job shedding continued amongst the survey group, although the CBI said the decline slowed to its slowest rate in five years.
