A survey of more than 1,000 small businesses has identified slight increases in general confidence levels over the past year - but a lukewarm reception to government economic policies.

Forty-three per cent of those questioned now feel optimistic about the future, compared to only 36 per cent in July 1998.

But the Business Pages survey also found that only two per cent were very satisfied with the government's management of the economy.

The survey, carried out in October, identified the principal measures likely to increase business confidence as a solution to the millennium bug (43 per cent) and the introduction of new government initiatives (49 per cent).

The survey also identified key forecast trends over the coming year:

l Forty-two per cent of small businesses intend to invest more,

l Seventy-nine per cent expect their firms to grow,

l Eighty-five per cent forecast a growth in sales,

l Seventy-three per cent expect to recruit more staff.

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