The S&P Global flash UK composite purchasing managers’ index (PMI) reported a reading of 52.7 in July, up from 52.3 in June.
It came in slightly above the expectations of economists who had pencilled in a reading of 52.5 for the latest survey.
The flash figures are based on preliminary data of business activity in the manufacturing and services industries.
Any score below 50 indicates that activity is contracting, while any score above means it is growing.
The survey revealed that the level of total new business increased at the fastest rate for 15 months in July, with firms citing an improvement in general business confidence meaning they had been able to secure new contracts.
This followed some companies reporting a pause in spending from their customers as they waited to see the outcome of the General Election.
The Labour party secured a landslide victory in the election last month, ushering in a new Government after 14 years of Conservative leadership.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said the “first post-election business survey paints a welcoming picture for the new Government”.
The PMI survey showed that the manufacturing sector – which includes carmakers, aerospace engineers, food and drink, chemicals and electronics factories – saw the sharpest rise in activity.
This is despite manufacturers facing increasing costs as global shipping delays linked to disruption in the Red Sea drove transport bills higher.
The service sector, which spans businesses from hospitality and culture to housing and finance, edged up this month thanks to more new work, but at a slower rate than earlier this year.
Meanwhile, the data revealed that firms hired staff at the fastest pace for more than a year, outweighing some mentions of redundancies and budget cuts.
Both manufacturing and services firms showed greater levels of optimism this month.
Workers are expecting greater levels of demand, stronger business investment, political stability and interest rate cuts, according to the survey.
Mr Williamson said UK firms had “gained optimism about the future, reporting a renewed surge in demand and taking on staff in greater numbers”.
“Prices have meanwhile risen at their lowest rate for three and a half years, further raising the prospect of a summer rate cut,” he said.
But he noted that Bank of England policymakers could be cautious of signs of inflationary pressures, including higher shipping costs linked to the Red Sea crisis and stronger hiring levels pushing up wages.
Elliott Jordan-Doak, senior UK economist for Pantheon Macroeconomics, said: “Rate-setters will take comfort from slowing output price inflation.
“But signs that growth is accelerating after the General Election pause, and especially stronger jobs growth, will keep the Monetary Policy Committee (MPC) alert to the risk that wage growth slows more gradually than they assume.
“It remains an extremely close call, but we stick with our forecast that the MPC will wait until September to cut rates.”
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