Media playback is unsupported on your device Media caption Lord Bamford: "We are the 5th or 6th largest economy in the world anyhow"

The chairman of construction equipment firm JCB has said the UK should not fear an exit from the European Union.

"We are the fifth or sixth largest economy in the world. We could exist on our own - peacefully and sensibly," Lord Bamford told BBC Midlands Today.

Lord Bamford said an exit would enable the UK to "negotiate as our country rather than being one of 28 nations".

Prime Minister David Cameron has promised an in-out referendum on the UK's EU membership by the end of 2017.

Analysis: Kamal Ahmed, BBC business editor

Post the election, the skeleton "no fear leaving the EU" argument is starting to form.

It is based on three premises - Britain is a major trading nation; free trade agreements with fast growth economies will be easier outside the EU; and Britain can rid itself of unnecessary regulations which some believe hold back growth.

Of course, a significant number of businesses disagree, believing that being inside a reformed EU is the best future for the UK.

I was struck during a visit to Japan in 2012 how company leaders there were baffled at the thought that Britain would leave the largest trading union in the world.

What business actually "thinks" about Europe - and where the majority opinion lies - will be one of the defining issues ahead of the in/out referendum promised by David Cameron before the end of 2017.

Read Kamal's blog in full

'Nuanced'

British Chambers of Commerce director general John Longworth said that 55% of his members were in favour of a "reformed Europe".

"The 'reformed' part of it is quite important, and if you look at a lot of the economic reports... the in-out debate is more nuanced than a lot of people would have us believe," he told the BBC.

He said the BCC was waiting to see what shape reform proposals would take, and that it was down to UK politicians to explain to business what reforms they would be pursuing from Brussels.

Mr Longworth said that, while businesses were used to dealing with uncertainty, an in-out referendum should "take place as as soon as is practical".

'Well placed'

Lord Bamford was speaking as JCB, a privately-owned firm, reported £303m in underlying earnings for 2014, compared with £313m in 2013.

JCB said the UK's construction boom had helped offset weaker markets globally.

The construction equipment market in both Brazil and China dropped by 17% last year, with Russia down 27% and India by almost 15%, it reported.

In contrast, the market for plant machinery in the UK surged by 30%, while in the US it rose 13%.

Overall JCB said sales totalled £2.5bn, down 6% on 2013.

Lord Bamford said the firm was "well placed" to capitalise on improving growth in developing countries.

"The need for infrastructure in much of the developing world remains acute and will eventually drive a resumption of growth," he added.