Confidence among small business owners has notably improved, according to a new report from the Small Firms Association (SFA).

The latest Small Business Sentiment survey shows that over half of SFA members feel that the business environment is improving, compared with just 35% last summer.

"Despite the challenges faced by our small business community in early 2021, business owners and entrepreneurs are confident for summer 2021 and the second half of the year," said Sven Spollen-Behrens, Director of SFA.

He said domestic economic growth continues to be identified as the primary driver of business opportunities this year.

"70% of respondents plan to invest in their business this year with business growth, IT and brand development identified as areas of priority," he said.

Covid-19 restrictions in the first half of the year led to decreased working hours, the pausing or cancelling of planned recruitment and a temporary reduction in staff numbers.

However, despite these challenges, survey respondents said they expect wage rates to increase over the coming months.

"As we restart our economy and move towards recovery it is vital that we bring down unemployment and restore working hours," Mr Spollen-Behrens said.

The survey shows that business owners are also looking for a delay in the introduction of a Statutory Sick Pay scheme.

With the vaccination roll out picking up pace, Mr Spollen-Behrens said he believes a return to normal trading in the second half of 2021 is now within grasp.

"The SFA will remain focused on working and supporting members, as they begin to welcome back customers and return to the office," he said.