A near majority of small to medium-sized enterprise (SME) business leaders are optimistic about the prospects for 2007, a study reveals.

According to the results of a survey by Alliance & Leicester Commercial Bank, 48 per cent of SMEs are positive about the future of the UK's economic performance and view expansion as their primary objective over the next 12 months.

A further 30 per cent view building stronger customer relationships as their primary objective for the coming year, reports the Barnoldswick & Earby Times.

"It's really encouraging that so many small business are optimistic and ambitious about their prospects in 2007 and are planning for growth," said Steve Jennings, director of business banking at Alliance & Leicester Commercial Bank.

However, despite the optimism, 32 per cent of respondents said that they thought the new year would bring a number of economic challenges.

In related news, a recent survey by KPMG has found that wage inflation rose at its fastest rate in over five years.