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Business optimism among UK food and drink manufacturers is now on a sustained upward track and driving new investment in the sector, the Food and Drink Federation (FDF) has reported.

Getting towards half (44%) of manufacturers responding to the FDF's Business Confidence Survey said they had increased capital expenditure in the second quarter of 2013. Investment in R&D and training also increased.

The sector, said the Federation, is being buoyed by a third successive quarter of increased optimism and an increase in the Annual Investment Allowance.

"Increased capital expenditure can in part be attributed to temporary changes to the Annual Investment Allowance, which offers tax relief on investments of up to £250,000," said Steve Barnes, FDF's economic and commercial services director.

The sector is also confident of sales growth in the third quarter – helped by the improved weather and a reviving economy.

Between April and June, UK sales grew in line with inflation, but 20% more businesses are expecting higher sales growth in the third quarter. Export sales are also expects to remain strong.

Confidence is being further supported by stable price and ingredient costs: 72% of the FDF's respondents expecting product prices to be broadly stable in third quarter due to summer promotions.