SYDNEY - The recent lift in consumer confidence should serve a warning to businesses that they need to be ready to ramp up production when the economic recover takes off, an expert from financial advisory firm William Buck says.

William Buck business advisory director Dennis Laundy says while the exact timing of the upswing is uncertain, recent indications suggests it is not too far away.

Laundy says while the current mood is one of cautious optimism, the upswing, when it arrives, is likely to happen very quickly.

"If you are going to be too negative and not prepared to take a risk then you are going to miss out," Laundy said from Adelaide.

"You've got to be prepared to take a risk and back yourself because if you don't back yourself then you are not going to be in a position to participate when things turn around."

The sharp rise in consumer confidence was shown in a private sector surveys published this week.

A survey by Westpac and the Melbourne Institute found consumer confidence at its highest level since October 2007.

Separately, the latest edition of the National Australia Bank monthly business survey found companies were at their most optimistic in two years.

Laundy said sentiment had a huge impact on business activity.

"Once that sentiment gets a bit of a head of steam up, well it really starts to change the way that people think about things," Laundy said.

"They stop thinking doom and gloom and maybe things are going to improve a bit and things will start to turn around."

Laundy said managers had to ensure they were able to ramp up production of goods as quickly as possible, or have enough staff to cope with the increased demand for services.

"If you leave it too long the recovery will already be here and you won't be ready for it," Laundy said.

"To some extent you've got to take a bit of a punt on that.

"It may be that you do it a little bit prematurely, you will be forced to hold stock for a little bit longer if it takes a little bit longer to turn around, but at least when it does, you will be ready."

Managers may have to reacquaint themselves with old suppliers and, if necessary, establish new relationships, he said.

Laundy advised managers to borrow appropriately as interest rates look set to rise after being cut to multi-decade lows earlier this year.

"You've got to try to get the right product for the right use," Laundy said.

"In other words, you don't use short-term overdraft finance for long-term assets because you are paying through the nose."

- AAP