WORCESTERSHIRE is sharing with Herefordshire a buoyant economy and an optimitic outlook in business according to a survey of sales activity.

Releasing the results of its latest quarterly survey until December, planning and policy manager of the Chamber of Commerce Herefordshire and Worcestershire Marc Baylis said, however, that while the economy seemed stable recruitment was causing problems for firms.

The survey of 444 companies employing 16,580 people also looked at workforce trends, cashflow, investment, capacity and prices and costs.

Activity in the domestic market had increased for 43 per cent of companies and overall was up 4 per cent on last year.

In the export markets 51 per cent of companies reported sales and custom was constant.

On costs, 36 per cent expected an increase in the price of their goods over the next three months compared with 29 per cent last year with "other overheads" followed by raw material prices cited as the main cause.

A quarter of the companies expected to increase their workforce over the fist three months of this year but 65 per cent had experienced recruitment difficulties in the survey period.

Over a quarter reported cashflow improvements and 35 per cent said they were working at full capacity, the highest percentage since March 1998.

There was a drop to 40 per cent in the number who believed the UK should adopt the Euro compared with 45 per cent previously.