Optimism among manufacturing SMEs is at its highest level since records began in 1988, a new survey shows.

Total orders and output are also up, according to the figures from the CBI’s latest SME (small-to-medium enterprise) survey covering the three months to April.

It also said job numbers enjoyed a sharp boost and were expected to grow at a stronger pace in the subsequent period.

Meanwhile, domestic orders rose strongly and export orders bounced back from a fall in the previous quarter, according to the survey of 366 SME manufacturers.

Katja Hall, the CBI’s chief policy director, said: “It’s very encouraging to see record levels of optimism among smaller manufacturers, on the back of robust growth in domestic and export orders, and a leap in output levels.

“Hiring is also on the up, and is set to strengthen as we look ahead into 2014.

“As confidence beds in, we need to see more firms exporting their products to high-growth markets across the globe, giving a healthy and sustainable boost to the UK’s recovery.”

The survey found 46% of firms were more optimistic regarding their business situation, while 10% were less optimistic, giving a balance of 36% which was the highest on record since October 1988.

It backs up recent figures showing business optimism among manufacturers as a whole was at its best since 1973. But it is the performance of smaller firms in particular that is seen as key to a sustainable recovery.

Official data last week showed the sector as a whole grew by 1.3% in the first quarter, its best performance for nearly four years. But it remains 7.7% below its pre-crisis level.