According to the Federation of Small Businesses (FSB) their confidence index report found:
While optimism had picked up across nearly the whole of the UK, London was far more up beat than other regions. The capital came in at 46%, while there were much lower levels of confidence in northern regions.
Confidence in the north east decreased.
FSB members reported that inflationary pressures have eased as just over 60% said that the cost of doing business had increased in the quarter, below the peak in late 2011 of 75% and below the last three quarters.
Firms are also seeing cheaper finance but there has been little year-on-year movement in the percentage of companies applying for credit.
Another sign of optimism in the economy has sprung up - jobs are being created by small businesses for the first time in three years, says a leading industry organisation.
More firms are looking to employ new staff rather than reduce their workforce, an annual report into small business operations found.
The Federation of Small Businesses (FSB) found its confidence index had doubled its second quarter score and rose to 33.5, representing the third successive quarter of growth.
Financial and business services, as well as technology firms, reported the highest levels of confidence, although those in the leisure and entertainment sectors were less optimistic as household spending power remains squeezed.
The Federation of Small Businesses has called on energy reform "to go hand in hand with radical changes in the retail energy markets" to deliver tighter regulation of the "big six" energy companies.
While we welcome the much needed certainty the Energy Bill will give to investors to help secure the UK’s energy supply, we are concerned that small firms will be left exposed to ever increasing energy bills. The remorseless rise in energy costs is hurting not only individual businesses but also the competitiveness of the UK as a whole.
– John Walker, National Chairman, Federation of Small Businesses