SCOTTISH firms are responding to signs of improving economic growth by upping their marketing budgets, a report has claimed.

The latest Bellwether Report from industry body the IPA, out today, reveals that marketing budgets have been revised upwards for the fifth consecutive quarter. It found the growth in the final quarter of 2014 reached the second-highest level since the study began in 2000.

The report revealed a positive net balance of 11% of companies in Scotland registered an increase in budgets during the quarter. This marked a decline on the net balance of 12.3% reported in the third quarter of 2013 - a series record.

Internet spending budgets saw the sharpest rise, with a net balance of 9.2% firms upwardly revising their outlays.

The net balance is calculated by taking the percentage of firms reporting a downward revision in their budgets from those confirming an upward revision.

The report also found a net balance of 47% of companies reported greater optimism about their financial prospects.

This was again slightly down on the third quarter of 2013, when a 49.2% of firms reported feeling more optimistic about their finances, also a series record.

The survey, undertaken by Markit Economics on behalf of the IPA, also signalled that the optimism will continue in 2014, with provisional data indicating that a net balance of 25.8% are expecting to see growth. This would be the most positive reading since 2008, the IPA reports.

The Bellwether Report predicts there will be a 3.3% increase in advertising spend in 2014, based on the Office for Budget Responsibilty's 2.4% prediction of economic growth. It expects that level to be maintained in 2015 before rising to 4% in 2016, 2017 and 2018.