Business optimism in Bradford is up despite concerns about spiralling energy costs and tighter profit margins.

The latest six monthly economic survey by Yorkshire Forward and the Confederation of British Industry survey published today shows the Yorkshire region is one of the UK's most positive.

After a gloomy response late last year the first results this year show Yorkshire bosses are behind only London and the North West in their outlook.

In Bradford, optimism has come from pessimism and the district is among the most confident in the region.

Although the district's profit margins and employment levels have both fallen over the last six months, both are expected to rise.

Patrick Bowes, Yorkshire Forward's principal economist, said construction companies were the most confident. They are followed by financial and business services whose belief in good growth is higher than the national average.

Yorkshire's manufacturing sector is bigger the rest of the country and, while struggling with orders and employment, remains fairly positive.

"We do feel things are going to pick up strongly to 2007," said Mr Bowes.

But it is energy which continues to cause concern, with 60 per cent of all Yorkshire companies saying heating and lighting have the biggest direct impact.

Terry Hodgkinson, chairman of Yorkshire Forward, said it was "heartening" to see confidence rise. But he warned against complacency and said many issues needed to be addressed.

He said: "Energy costs are increasing but there is nothing we can do to change the price of oil. Companies have to find new ways to conserve energy."

The survey showed companies in Yorkshire were at the bottom of the league for funding training. Just 55 per cent said they had paid for some kind of staff training the lowest in the country.

Mr Hodgkinson said this was a "fundamental" issue which needed attention.

The transport infrastructure remains an issue in Bradford and the rest of the region with a quarter of companies listing it as their biggest concern.

Mr Hodgkinson said businesses needed to be more diverse and flexible in times they used the roads to avoid the "same two hours" of congestion.

"We cannot just concrete over our great green fields," he said. But he said Yorkshire Forward would continue lobbying for more investment in road, rail and air infrastructure from the Government's next comprehensive spending review.

Penny Hemming, CBI director for Yorkshire and the Humber, said: "It is encouraging that firms in the region expect stronger growth in output and orders and have optimistic intentions.

"However, looking back, growth has been more modest because of increases on costs and profit margins have been squeezed."

e-mail: richard.woodward@bradford.newsquest.co.uk