CONFIDENCE in the manufacturing and service sectors is at its highest for years.

The Global Business Outlook survey, by Markit Economics on behalf of accountants KPMG, reveals that optimism among manufacturers is at its highest in the 8½-year history of the survey.

And service providers’ sentiment is the strongest since April 2007.

Both sectors are also reporting stronger forecasts for business activity during the next 12 months.

The survey also highlights improved expectations for service sector jobs growth since the previous survey in October 2010.

Inflationary pressures are, however, set to intensify over the coming year as higher energy and raw material prices filter through to firms and consumers.

Commenting on the latest survey findings, Ian Goalen, senior partner at KPMG in Liverpool, said: “Business now appears to be preparing itself for growth. Although recovery is by no means yet assured, there are enough positive signs to mean that businesses need to be planning for better times – or risk being left behind when they take hold.”

Chris Williamson, chief economist at Markit, said:

“The business outlook has improved across the board.”