Businesses in Wales, including those in Gwent, are continuing to feel confident as the economic improvement gains momentum, according to the latest ICAEW/Grant Thornton UK Business Confidence Monitor.

The report shows that confidence in Wales has been on a general upward trend since Q3 2012 and now stands at +30.9, well above its reading from a year earlier. Despite that, confidence is below the UK national average of +37.2.

The report comes on the same day that the British Chambers of Commerce is forcasting that the UK economy will exceed its pre-recession peak by the summer.

The BCC believes the UK will grow by 2.8 per cent this year and that the second quarter will see GDP climb back to the level seen in the first quarter of 2008.

A year ago amid a much gloomier picture for the economy, the BCC predicted the pre-recession peak would not be reached until 2016, although a number of revisions brought this forward to the third quarter of 2014 in December.

While it has taken more than six years to return the economy to the position it was in before it nosedived, it abates earlier fears of a lost decade.

BCC director general John Longworth said: "Our economic recovery is gaining momentum. Businesses across the UK are expanding and creating jobs, and our increasingly sunny predictions for growth are a testament to their drive and ambition."

The BCC expects the first increase in interest rates will happen in the autumn next year - one quarter earlier than previously envisaged, before rising to 1.5% in the second half of 2016. GDP will be 2.5% next year and in 2016.

However, Mr Longworth said it was not time to break out the champagne, particularly as business investment is likely to remain below pre-crisis levels for some time to come.

He added: "Major issues remain, such as the unacceptably high level of youth unemployment. We urge the Chancellor to use this month's Budget wisely by incentivising businesses to hire young people so that the next generation of workers are not left behind.

"We just hope that as the general election gets closer, politicians are not tempted to abandon a drive for long-term economic security in favour of short-term vote winners.

"No government over the next decade can afford to get distracted - and our leaders must do everything in their power to ensure the economy goes from being merely good, to being truly great."

In line with confidence levels, businesses in Wales expect growth in their key performance indicators to pick up over the coming 12 months. Turnover is projected to rise by 4.7 per cent, from 3.7 per cent over the previous year, gross profits to grow 4.5 per cent, from 3.5 per cent , and sales volumes are expected to increase by 4.8 per cent over the next year, compared to growth of 4.3 per cent over the year just gone.

David Lermon, ICAEW director for Wales, said: “As we have seen with the recent GDP figures and this quarter’s BCM, the recovery is accelerating. We need to continue to push to grow our exports, against a backdrop of a widening trade deficit, at the same time as ensuring that the momentum the UK economy has is maintained across all parts of the country. If the forecast figures for key performance indicators in the country are achieved, it would suggest that the economic recovery is firmly in place in Wales.”

Businesses expect the acceleration in turnover, sales volumes and profit growth over the coming year to be supported by an increase in demand from both the UK and overseas. Domestic sales are projected to rise by 5.3 per cent over the coming 12 months, up from 2.9 per cent over the past year. Meanwhile, export growth is expected to pick up to 4.5 per cent over the next year, a marked increase from 1.6 per cent growth reported over the past 12 months.