Marketing budgets for the coming financial year are at their highest level for more than two years.

According to the latest Bellwether report - the quarterly survey of 300 senior marketers from the UK’s top companies and a barometer of confidence in the industry - 36% are setting budgets higher for 2013/14 compared to 23% reducing spend. The net balance of 13% is the highest since the first quarter of 2011.

Those indicating they were planning to spend more appear to have been spurred by increased confidence in their own company’s prospects, says Marketing Week.

More than a third (36%) of the marketing chiefs polled are expecting improvements in the performance of their own companies, up from 28% in the previous quarter. Less than a fifth (19%) are more pessimistic that they were at the end of 2012.

The news comes despite further indications UK economic growth remains flat.

Think tank the National Institute of Economic and Social Research said yesterday the UK economy grew by just 0.1 per cent in the first quarter of 2013, meaning the UK narrowly avoided a triple dip recession. The British Retail Consortium said this week sales slowed to 1.9 per cent in March.

Chris Williamson, chief economist at Markit and author of the Bellwether report, says continued uncertainty could wipe out any early year optimism marketers are feeling.

“An upturn in business confidence and corresponding increase in budgeted marketing spend for 2013 augurs well for the wider economy.

However, while the Bellwether is suggesting the economy is recovering, it looks set to be another challenging year for businesses and the pace of economic expansion is likely to be modest.

“The hope among many companies is that increased sales and marketing activity will drive business growth, but firms will need to see convincing signs that demand and profits are improving in coming months to prevent business confidence falling again and marketing budgets from being revised down as the year proceeds,” he says.

Fears about the long-term prospects for marketing were compounded by Bellwether’s forecast that UK advertising spend will fall by 0.3% in 2013. The figure is based on predictions for GDP and consumer spending growth.