Small firms in Oxford have weathered the recession better than most of the UK, a new report has revealed.

The BT Business Pulse survey shows one in four Oxford firms saw an increase in turnover during the downturn and 72 per cent are expecting an upturn next year.

Despite national economic uncertainty, 63 per cent of Oxford firms remain confident about their own business prospects with almost half saying they have emerged from the recession as stronger businesses by changing the ways they operate.

Keith Slater, board member of the Oxfordshire Chamber of Commerce, said: “It doesn't surprise me many of the city's companies have been doing well.

“As a result of the spin outs from the universities, the developments originating in our centres of technological excellence and the entrepreneurship that comes from having a high proportion of the population with skills and qualifications well above the average we tend to be at the leading edge.”

But Mr Slater warned that despite low interest rates, costs of borrowing for small businesses can still be high, while sectors such as retail and suppliers to the motor industry have suffered badly in the recession.

He added: ““We need to build the skill levels of a large segment of our population that have few or no qualifications so that we can take advantage of the growth momentum when it really arrives.”

The Business Pulse findings from more than 7,000 UK small firms were unveiled as part of Small Business Week which is dedicated to championing commercial, industry and government support for the UK’s 4.7 million smaller enterprises.

Mick Hegarty, strategy director for BT Business, said: “This comprehensive survey demonstrates the resilience of small businesses in some of the most challenging economic conditions of the past 50 years.

“Most firms are positive about the future and in many cases they have emerged stronger and fitter from the downturn.”