Small and medium-sized enterprises (SMEs) have recorded the highest hiring growth since 1998, according to new findings.

Research published by the Confederation of British Industry (CBI) revealed that 34 per cent of those polled increased their headcount in the three months leading up to July.

Just nine per cent said that it had decreased, with the CBI SME Trends Survey showing that the upturn in hiring has in part been caused by optimism about the wider economy.

More than 500 businesses were polled for the study and of those firms, nearly one-third (31 per cent) were more confident about their business' economic position, while only 11 per cent are less optimistic than they were in the three months previously.

The CBI revealed that domestic orders and output both rose strongly, for the fourth consecutive quarter, and are expected to grow robustly again in the next three months.

Commenting on the findings, Katja Hall, CBI deputy director-general, said: "Smaller manufacturers are settling into a regular growth pattern, with their order books and output growing for the fourth consecutive quarter. Firms remain upbeat about their business situation and they are hiring at their fastest rate since 1988."

CBI figures showed that 36 per cent of small and medium-sized manufacturers reported a rise in new orders, while 22 per cent said they fell, giving a balance of +14 per cent.

However, the study also indicated that the future may be a little brighter for many firms with orders expected to increase even more strongly next quarter (+26 per cent).

Ms Hall added: "Export orders have underperformed this quarter, which may in part be because of the strength of sterling. We need the government to get behind our small and medium-sized manufacturers to help them to sell their products and services to new markets around the world, giving a sustainable boost to long-term growth."

Many companies are planning to take onboard new staff and quickly train them in order to take advantage of growing consumer confidence; something that can be achieved through regular sessions providing an opportunity to learn, develop and improve.