Business confidence is the key to surviving the recession when forward-thinking companies who plan for the upturn will come out on top.

That was the message from Richard Lambert, director general of the CBI, during a visit to Shropshire to see how manufacturers are coping with the recession.

Mr Lambert, who met with bosses at Ricoh and GKN Wheels in Telford, said there were early signs that the economy was starting to slowly recover but business and consumer confidence was “vital” for growth in 2010.

“I’m afraid credit conditions are still very tough, especially for SMEs, so for a lot of companies cash and costs are still the critical issue.

“The challenge for companies is to look through the recession and think how they can come out of it stronger, whether that’s offering training opportunities for their people, new business opportunities, and business confidence is so important.

“My feeling is that recovery is beginning to be visible but it will be quite a slow one, it’s not going to be a bounce-back to sunny days. This will be a hard slog but there are companies, even in the manufacturing sector, which are doing well.”

He spoke to the Shropshire Star just days after new figures showed the Government’s “cash for bangers” car-scrappage scheme was slowing the decline in new vehicle sales.

Car component manufacturers in the county which have put staff on short time work and made redundancies are also seeing the signs of the upturn, with Hortonwood’s Denso factory announcing last week it was re-creating 30 posts on the production lines.

Mr Lambert said: “I think that if you look at the automotive manufacturers and the productivity of the plants in the UK now compared with the rest of Europe, it’s very impressive.

“Demand has really taken a hammering over the last nine months, manufacturers have had to adjust production dramatically as they all got left with too much stock, they have now got their stocks much better in balance and the scrappage is having a positive impact.

“I have spoken to four or five manufacturers in recent days, a number are now taking on people and they are saying that they don’t think this is orders brought forward but also the market has expanded.

“But the question, and I don’t think there is an answer yet, is once everything is ramped up and the distribution pipeline is filled, will the public have enough confidence to sustain it?

“The good news that consumer confidence has picked up as has business confidence, but credit is still in short supply, so for the next 12 months outlook is uncertain.”