Business optimism in the Yorkshire region is rising faster than anywhere else in the UK and has reached a four-year high, a new survey claimed today.

The latest CBI and Yorkshire Forward survey of economic trends has revealed that a balance of a third of companies are optimistic about the overall situation.

The figure is the second consecutive rise detected in the survey, the highest since it began in 2000, and above the UK as a whole.

For the first time in three years, businesses have reported an increase in export orders while a balance of a third also expect domestic orders to increase. And that is being tipped to lead to a revival in manufacturing during the year, backed up by a British Chambers of Commerce survey which reports a balance of seven per cent of firms in the region reporting an increase in export orders over the past three months.

While profit margins continue to be squeezed, investment levels are expected to increase by record levels seen since the surveys began, with training and retraining set to receive the biggest boost, the survey said.

But it also revealed that intense price competition has continued to put the squeeze on profits and ongoing concern about the exchange rate and new global competitors.

The survey highlighted the worries businesses have about being able to attract staff with the skills they need, but predicted West Yorkshire would see the biggest growth in employment.

"This survey gives a very positive outlook for the region's economy where the increase in business confidence is outstripping every other region except London," said Yorkshire Forward chairman Terry Hodgkinson.

"However this success brings its own potential problems and businesses need to look to invest in appropriate staff training to ensure they can continue to grow as the economy expands."

Penny Hemming, director of the CBI in Yorkshire and Humber, said: "It is excellent news for the region that orders and productivity are up. The region's businesses still face stiff price competition in selling markets and incoming costs coming through a number of areas. As a result, the increased activity has yet to impact on profitability and margins remain tight."