BUSINESS CONFIDENCE in the SME sector has rebounded to its highest level in three years on the back of improved exports.

The second quarterly survey for 2010 conducted by Isme, the small firms’ association, found manufacturing firms were the most optimistic in the SME sector, followed by services and distribution firms.

However, the business environment is still considered “poor” or “very poor” by most of the 600 firms responding to the survey. Economic uncertainty remains the biggest concern, and two-thirds of SMEs believe the viability of their business is under threat.

On the positive side, the value of SME exports has shown a net increase for the first time since the last quarter of 2007.