DESPITE increasing costs small business confidence in the region is recovering, a new survey shows.

The figures from the Federation of Small Businesses (FSB) suggest that 87 per cent of small firms in the north west expect to remain the same size or expand over the coming year.

One in four (28 per cent) of the exporters surveyed said they expect to increase overseas sales between now and the end of March.

Chris Burgess, Merseyside, West Cheshire and Wigan borough chairman of the FSB, said: “Small business confidence is showing resilience following the uncertainty reported in the wake of the Brexit vote, which is good news."

However small businesses admitted facing challenges in the survey.

Around two-thirds (62 per cent) reported an increase in the cost of doing business compared to last year, with 25 per cent saying labour costs is the main cause of this increase.

Mr Burgess added: "The fall in the value of the pound will certainly have had an impact but we shouldn’t underestimate efforts to make UK goods and services more competitive overseas and help small businesses go out to find new markets and new customers.

“However with business costs rising significant challenges lie ahead for small business owners and there is still a long way to go to create an enterprise environment in the UK that genuinely supports business growth.

"This will become more urgent as we move closer to leaving the European Union.

“In addition FSB is committed to working with agencies in Liverpool City Region, Cheshire and Greater Manchester to make the region the best it can be in which to start and grow a business.”