KIRKLEES companies are feeling more optimistic about their prospects – despite concerns over government cutbacks and unstable international markets.

The latest survey by the Lockwood-based Mid Yorkshire Chamber of Commerce showed an improving picture for domestic orders and sales, a slow recovery in cash flow and investment intentions and forecasts for better profits and turnover.

But it warned that overheads and raw material costs remained a concern while hopes for employment had diminished slightly.

Financial concerns and taxation were now viewed as the major external issues affecting businesses.

Steven Leigh, head of policy and representation at the chamber, said the survey showed chamber members in Kirklees, Calderdale and Wakefield were feeling more optimistic during the fourth quarter of the year compared with the previous three months.

He said: “This cautious optimism is holding steady despite worries which our members have expressed about international economic instability and the possible effects on the private sector of public sector austerity measures.

“Although we largely support the deficit reduction programme, we continue to lobby for ongoing funding to be made available for infrastructure projects, particularly transport infrastructure, in order to preserve economic prosperity in our region.”

Among the findings, the survey showed an 18-point rise in home sales from 12% to 30% and an 11-point improvement for home order books from 12% to 23%.

Export orders recovered by 38 percentage points from minus 6% to 32% while export sales and orders for manufacturers saw a “robust” recovery compared with earlier in the year.

Mr Leigh said an improving picture for manufacturers and exporters reflected the impact of the weak pound in making UK goods more competitive.

He added: “It is to be hoped that this is now the beginning of a re-balancing of the economy back to manufacturing.

“We will continue to lobby the government to assist further with initiatives such as the creation of a state-backed export trade credit insurance scheme, the broadening and simplification of R&D tax credits and improved promotion of UK trade.”

Mr Leigh said figures from the service sector were less robust, partly due to uncertainty about domestic demand in the first half of 2011 together with the effect on consumer spending of the increased VAT rate and likely increases in energy and raw material prices.

Mr Leigh said worries about inflation were now giving greater cause for concern.