BUSINESSES in the central south are in their healthiest state for six years and managers are feeling justifiably upbeat about their prospects for this year, according to the latest business in Britain survey from Lloyds TSB Corporate.

In the second half of 2003 companies notched up their best sales and orders performance since 1998, with 47 per cent of firms in the central south reporting increased turnover, 40 per cent a rise in orders and 41 per cent an upturn in export sales.

Even disappointing profit statistics - up for 29 per cent of firms and down for 35 per cent - failed to dampen spirits.

The survey's unique 'confidence index', which combines sales, order and profitability expectations for the next six months, has risen from 16 per cent to 24 per cent.

The survey also reveals that 19 per cent of central south companies plan investment in the next six months, while 20 per cent expect to recruit new staff.

Southampton-based Mark Handscomb, Lloyds TSB Corporate relationship director in the central south, said the boost in business confidence is a reversal of the situation early last year when the impact of the Iraq conflict cast an uncertain shadow over commerce and industry.

He said: "With consumer spending and business investment forecast to keep growing in 2004, firms in all sectors can feel confident that there will be a sustained demand for their products and services."

Mark sounded a note of caution, however, especially over financial management.

"It is still very important to maintain traditional business disciplines such as careful spending and keeping a watchful eye on cashflow - a problem for 18 per cent of companies in our region," he said.