Despite a -42% balance of printers predicting a worse first quarter, the reality was that only -18% said the general state of the trade was worse. There is also a renewed sense of optimism, with a positive 27% figure predicting a more favourable outlook over the next three months, compared to 16% a year ago.

BPIF head of external and corporate affairs Cicely Brown said: "Theres the general feeling that things are getting rosier out there.

"That is not to say that there has been a huge jump out of semi-recession, but we have turned a corner. Theres not rapid growth, but there is growth."

Some sectors performed better than others. The book sector reported that the Christmas peak lasted longer than expected, while the magazine sector struggled.

Although one in seven companies said they were working below capacity, this was healthier than the 85% of a year ago.

The report also highlighted that company failures are not having an effect on overcapacity, with the capacity remaining in the market in the shape of phoenix companies.

The findings are broadly in line with the latest figures from the CBI, which suggested that "the severity of the manufacturing recession may be starting to recede".

Story by John Davies