Small and medium-sized businesses in the UK are reporting improving conditions in demand and production of goods, according to data released by the Confederation of British Industry (CBI).

Quarterly figures produced by the CBI showed that 36% of manufacturing firms said they had experienced an increase in orders for their products in the first three months of 2010.

Although 26% of the companies that responded said they had seen a fall, the figures show a growth for the first time since January 2008.

"With demand expected to grow in the coming months, manufacturers are thinking about taking on extra staff over the next three months," said Russel Griggs from the CBI.