Seven in 10 small and medium businesses expect to grow in the next 12 months, with 42 per cent preparing to recruit more employees, according to research.

A study by Western Union Business Solutions (WUBS) quizzed 670 SMEs engaged in international trade. It found high levels of confidence in the sector, with one-in-four businesses expecting to expand by more than 10 per cent.

Perhaps even more telling is the finding that 23 per cent of the business had grown by more than 10 per cent in the previous 12 months.

The sunny forecast is being underpinned by intensions to invest and recruit new people. Some 42 per cent said they would take on staff, the highest ratio in the survey’s history.

Meanwhile almost two-thirds said they planned to invest in their business, with the majority expecting to spend on new technology and process improvement, as well as plant and machinery investments.

Christina Hamilton, UK MD of WUBS, said: “This type of investment in people and process improvement is a clear sign that SMEs that trade internationally are investing for the long term.

“After several years of decline and difficult trading conditions it is very positive news for the wider UK economy.”