Businesses in Coventry and Warwickshire remain cautiously optimistic, according to a major economic survey which acts as a barometer for the local economy.

The Coventry and Warwickshire Chamber of Commerce polled more than 170 businesses in its latest quarterly economic survey and the figures are fed into national research on the economy.

The Chamber's figures for quarter three of 2010 suggest that businesses in the area can see some light at the end of the tunnel, particularly in manufacturing.

Sixty-three per cent of manufacturers who responded said turnover would rise in the next year while 41 per cent of service-based businesses thought turnover would increase.

Just 12 per cent of manufacturers thought turnover would drop and 21 per cent of service-based companies expected a decrease.

In terms of recruitment, 22 per cent of manufacturers think they will be increasing staff numbers in the next three months with 69 per cent saying numbers would stay the same.

In the service sector, 24 per cent said they would take on more staff and a further 64 per cent said their workforce would remain the same.

Alan Durham, director of policy at the Chamber, said: "There is certainly more optimism around compared with, say, a year ago.

"But companies in Coventry and Warwickshire are by no means anticipating huge growth. These figures - along with the anecdotal evidence - suggest it is a case of cautious optimism.

"That said, in both manufacturing and the service sectors there are businesses experiencing difficulties and we must not become complacent in any way shape or form.

"In particular, I know the construction industry is having a difficult time and that is one particular sector we must pay particular attention to.

"In terms of recruitment, the numbers are more positive but they are not strong enough to suggest that the private sector can offset the predicted cuts in the public sector. 

"It backs up our policy as a Chamber that we will continue to put pressure on the Government to do more to encourage and assist recruitment in the private sector."

In manufacturing, 53 per cent of companies said sales had increased in the past three months with overseas orders remaining firm with 40 per cent of manufacturers saying they have gone up in the past quarter.

In the service sector, 29 per cent of firms said sales were up in the past three months, 49 per cent said they had stayed the same with 22 per cent reporting a decrease.

"We have to keep a firm eye on the figures," added Durham. "The service sector also appears to be feeling the pinch more than manufacturing at this moment - that needs to be monitored."