OPTIMISM is high among British companies but Scotland's small firms show the strongest figures of any UK region.

OPTIMISM is high among British companies but Scotland's small firms show the strongest figures of any UK region.

According to Lloyds TSB, the economy rebounded sharply in April and above-average growth is likely to be sustained throughout the second quarter of the year.

This follows on from Scotland being the best performing region on the first quarter of the year with the strongest growth rate since 1999.

Lloyds TSB also found the balance of firms feeling optimistic rather than pessimistic about the economy rose 12 percentage points in April, up to 41% from 29% in March.

In addition, when asked about their own business activity, 67% of firms expect trade to increase, a third expect it to stay the same and just one in 50 expect a decline.

Trevor Williams, Lloyds TSB Corporate Markets' chief economist, said: "This leap in confidence suggests a robust April and the numbers imply this rate of healthy economic growth will persist."

He added that stronger demand growth has allowed firms to increase prices, and investment spend is outstripping consumer spending.

Mr Williams added: "With official estimates of annual gross domestic product growth in the first quarter currently at 2.8%, this survey indicates this pace is on course to be replicated in Q2 as well."

A survey of the SME sector by PKF accountants reveals a similarly positive outlook, especially in Scotland.

Its quarterly survey of 800 SMEs in the construction, manufacturing and service sectors revealed that business output across all sectors rose.

It found the rise was due to increased customer demand and new orders, seasonality and more effective marketing.

In construction, better weather was an important factor while in the service sector the end of the tax year was said to be significant.

But it's not all good news. PKF partner for growing business Stuart Barnsdall said: "SMEs across the UK continue to perform robustly, but ever-increasing costs of raw materials are forcing businesses to put up prices.

"There have already been several recent interest rate rises and with inflationary pressure still building, the Bank of England will almost certainly raise them again so robust growth is likely to be restrained."