Trading conditions for the UK’s small and medium-sized enterprises have stabilised over the past quarter, according to the CBI’s new Quarterly SME Trends survey.

Following a deterioration in the previous three months, firms responding to the latest survey reported that total new orders and new domestic orders edged up slightly in the quarter to April.

Although export orders fell again, optimism about demand for exports improved for the second quarter running, with SMEs more confident than larger firms.

Output was flat among small and medium-sized manufacturers, in line with the performance of the rest of the manufacturing, having outperformed the sector as a whole in the previous survey, but expectations for the quarter ahead remained strong.

Investment intentions strengthened, with replacement and efficiency among the primary drivers, and hiring intentions remained firm, although concerns about skills shortages have picked up as a potential drag on output.

Rain Newton-Smith, CBI director for economics, said: “Higher spending on training is often a sign that skills shortages are biting again. This further underlines the need for business and government to work together in the coming months and make sure we get the design of the apprenticeship levy right, so it can deliver the quality skills training that firms need.

“While the depreciation of the pound since mid-2015 will be welcomed by exporters, the Government could and should do more to help by establishing an exports commission that can look at the challenges and opportunities for exporters more closely.”