According to the latest Sensis Business Index survey, 41 percent of small and medium business owners are feeling positive about their prospects in the coming year.

"Business confidence was ten points higher in the past quarter but the ACT is still well under the national average. However, the ACT is no longer ranked last on this dimension," said the report.

In January, the routine survey of 1000 businesses found the territory had the lowest business confidence in Australia with 31 percent of businesses expressing grave concerns.

But the latest report published this week found only 22 percent of businesses were concerned about the state of the ACT economy.

One small business owner with growing confidence is Adi Putra, the co-owner of The Barber Shop on Lonsdale Street in Braddon which opened earlier this year.

"I am feeling confident at the moment as there is a lot going on with infrastructure and a lot of new areas being developed with shops and businesses," he said.

"I'm doing well here but I also got started at the perfect time when this street began to boom and now everyone wants to jump on it."

Sensis chief executive John Allan said support for ACT government policies had increased by 13 percent during the last quarter.

"The view is that the ACT government is focussing on infrastructure development and doing a lot to promote the building industry," he said

"Support for the policies of the ACT government among [small and medium businesses] shifted into positive territory which it shares only with NSW and Tasmania."

Mr Putra, who has been cutting hair for 17 years, said he was confident the ACT government was paying attention to the concerns of small businesses but would wait for Tuesday's budget to pass judgment.

Canberra Business Chamber chief executive Robyn Hendry said the growing confidence would hopefully continue in coming months.

"We are still below the national average when it comes to confidence levels so I don't by any means think we are out of the woods or that anyone thinks this will be easy," she said.

Ms Hendry said the increase in confidence could be due to the easing of cuts to the public service in the federal budget.

"We have not seen anywhere near the scale of federal government contraction we had been expecting and that to me is a base we can build from, rather than waiting for the next bad story," she said.

"That being said, we have had some news about the potential for departments to move out of Canberra and that would be weighing on some people's minds."