BRITAIN's beleaguered manufacturing sector is beginning to recover, with sales, orders and confidence bouncing back, according to the British Chambers of Commerce.

Manufacturing has been hit hard over the past year by the slowdown in the global economy, competition from cheaper imports and the strong pound.

However, the BCC's survey showed manufacturing firms recorded a jump in expectations for turnover growth during the last quarter, up from a balance of plus 26 per cent last quarter - calculated by subtracting those reporting falls from those reporting a rise - to plus 47 per cent in the latest quarter.

Expectations for profits also rose, from plus 15 per cent the previous quarter to plus 35 per cent.

Service sector confidence also grew, up from plus 44 per cent to plus 57 per cent for expectations of turnover growth, while expectations of profitability rose from plus 34 per cent to plus 43 per cent.

However, employment in the manufacturing sector has weakened over the past few months, especially among smaller employers, the BCC said.

And small firms employing up to 19 staff have seen a slide in home sales and orders.

In the North-East, and Yorkshire, the manufacturing sector, which has been in steady decline for the past year, saw a sharp improvement in orders for both the home and export markets.

The service sector, however, continued to struggle.

John Irwin, president of the North East Chamber of Commerce, said: "There are some positives to take from these latest figures, and it is encouraging to see another improvement in business confidence, which should not be underestimated.

"Manufacturing still faces the biggest challenges, but there may be a glimmer of hope on the horizon with the increases in investment plans and perhaps some future orders still in the early piepline stage."

Dr John Bridge, chairman of One NorthEast added: "It's good to see a continued rise in short term business confidence which we should have expected after last year's turbulent events."

The improved figures follow official data released earlier this month showing manufacturing recorded its first improvement in output since August.

The Office for National Statistics said manufacturing output rose 0.4 per cent on a month-on-month basis during February.