Business optimism rose by 2%, but still amounted to a negative total of 27 for the quarter from April to June 2002.

The regular poll of Picons members also revealed a swing in favour of the UKs entry to the euro, with both the wait and see and join now sections tied at 48% each.

Despite domestic order books being strong, 60% of respondents said they were working below capacity, causing a fall in profits for 37% rather than the anticipated rise.

But export optimism remains positive, with 36% of suppliers, a rise of 13% on the previous quarter, anticipating further increases.