The West Midlands has seen a marked recovery from a poor showing in the early months of this year, says the British Chambers of Commerce.
Among the region's manufacturers, the BCC's quarterly economic survey shows confidence is still less strong than across the country as a whole.
But West Midlands industrialists who say they have revised their investment intentions upwards now outnumber those cutting them back by 18 per cent - two points above the national average. The balance expecting to become more profitable has risen to 35 per cent from 19 per cent in the first quarter.
Service providers in the West Midlands are even more confident about their profitability with a positive balance of 41 per cent.
Although that is down from an overwhelming 56 per cent in the first quarter, it is still seven points higher than the national average.
Falling export sales and orders are the weak feature of the survey nationally, but the picture has turned distinctly brighter in the West Midlands.
A positive balance of 23 per cent of manufacturers reporting better export deliveries replaces a minus 21 per cent in the last survey.
Export sales are weaker, but still narrowly back in positive territory after a negative balance of 26 per cent three months ago.
In the home market, orders remain depressed for the region's manufacturers, although actual deliveries have recovered, albeit to a level still below the national average.
Service sales, though, have continued to gain ground and now come out well above the national average in both home and export markets.
"These results for the West Midlands are not particularly good, but they buck the trend," said David Kern the BCC's economic adviser.
"Some are still short of the national averages, but they show a strong improvement."
Nationally, manufacturers' confidence in their profitability has picked up so strongly between the two quarters of this year so far that it is higher than at any time since late 1999.
The national figures show manufacturers enjoyed robust domestic demand in the second quarter and are more optimistic despite slower exports.
"The feature is that exports are down and confidence up," Mr Kern pointed out.
"A lot of the questionnaires were filled out at a time when there was talk of a Goldilocks economy (not too fast, but not too slow.)
"The results nationally are not bad.
"But the fall in export balances is worrying - it fits with the pretty appalling trade figures."
Once again, Mr Kern urged the Bank of England not to raise interest rates.
"We are worried that the market thinks interest rates will go up," he said. "There is no case for it.
"We are also worried about the proposed cut in the trade promotion budget and switching it to inward investment."
The survey showed few signs of either manufacturing or service companies expecting to raise their prices materially in the next three months.
The national balance of manufacturers expecting to raise their prices over those looking to cut them eased marginally to 21 per cent from 22 per cent in the first quarter.
Among providers of services it slipped to 15 per cent - its lowest in more than six years - from 27 per cent in the first quarter.
The BCC noted that this spelled bad news for companies' margins, which remain under two-pronged pressure from rising costs and intense competition from low-cost producers in Asia.