BUSINESS confidence in the region has picked up again after two years of decline, according to the latest survey from the CBI.

However, it’s not all good news.

According to the latest CBI / Experian Regional Trends Survey, only Wales showed a stronger upturn than the South East and London among the manufacturing sector.

The sentiment was also shared by the region’s exporters who showed rises in confidence for the second consecutive survey.

Malcolm Hyde, CBI South East regional director, said: "Rising costs, largely due to increased energy prices, continued to keep margins under pressure and the announcement last week that interest rates are to rise by a 0.25 per cent will not have helped matters.

"However, unlike elsewhere in the country, where costs rose markedly in all regions, the South East has seen only modest rises, although even the smallest of rise can seriously undermine a business’ viability."

The South East and London also experienced a further modest decline in new orders during the past three months.

Manufacturing firms continued to shed jobs in the past three months, but the pace of job losses was less steep than in the previous quarter, reflecting the modest upturn in output.

Although the pace of job losses may have slowed, 7,000 manufacturing jobs are estimated to go in the region.

Mr Hyde added: "Despite all this, businesses in the region remain confident that the outlook is more promising, with both new orders and export orders expected to register solid increases over the coming months.

"However, with rising oil prices and conflict in the Middle East, there remains a degree of uncertainty over the future outlook, especially for manufacturing businesses in our region."