Britain will avoid a feared triple dip recession, business leaders say.
The British Chambers of Commerce said near record levels of exports from the powerhouse services sector had kept the economy growing.
The manufacturing sector is improving
Its latest economic survey revealed export deliveries and orders from the services sector - which accounts for more than three quarters of UK economic output - rose close to the all-time highs seen in 1994 during the first three months of 2013.
The survey of more than 7,000 firms also found that business confidence had grown, while firms were looking to invest more in their businesses.
David Kern, BCC chief economist, said the results suggested the economy continued to grow in the first three months of 2013.
He added: "The survey reinforces our assessment that recent gross domestic product (GDP) figures published by the Office for National Statistics (ONS) have exaggerated the weakness of the UK economy and the volatility in output.
"If an announcement of negative growth in the first quarter is misleadingly described as a triple-dip recession, confidence will again be damaged unnecessarily."
He admitted the survey showed the UK's economic performance was still "inadequate", but confirms areas of strength.
The ONS said service sector output increased by 0.8% in January on a year earlier and was up 0.3% month-on-month, despite the snow impact at the start of the year.
It is hoped that this solid performance will offset woes in the construction and manufacturing sectors.
Increased demand for exports has been helping, boosted by the recent weakness of the pound, which makes it cheaper to buy British goods and services.
The BCC's survey showed improvements in both the manufacturing and services sectors, although employment had weakened.
John Longworth, director general of the BCC, said: "The fall in most employment balances is disappointing, and reminds us that a strong labour market cannot be taken for granted."
He added: "We should not be satisfied with a long and tortuous road to recovery.
"These results provide a glimpse of the as-yet-distant sunlit uplands of recovery - businesses up and down the country are working hard to drive the economy, create jobs and export, but they cannot accelerate this process alone.
"We must be proactive, bold and forthright to bolster business."
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