LESS than a third of entrepreneurs in the North-East believe it is a good time to be running a small business, research has revealed.

Findings from the Bank of Scotland business banking index show that only 29 per cent of small business owners believe the current climate is good for their venture.

Almost three quarters - 73 per cent - of the region's entrepreneurs also expect the economic conditions to get worse over the next 12 months, up 20 per cent on last year.

As a result, 54 per cent of those surveyed think it will be more difficult to run their business over the coming year.

Recruitment is also likely to suffer because of the rising levels of pessimism, with only 25 per cent of businesses planning to increase their staff over the next 12 months.

Ivan Matviak, head of Bank of Scotland business banking, said there is cause for optimism, despite the current climate.

"The ongoing turbulence in the financial markets is clearly taking its toll on the confidence of the North-East's entrepreneurs,"

he said. "With growth expectations dented and demand for services expected to slow down, small business owners are preparing themselves for further trouble ahead.

"However, there is cause for optimism on the horizon. With interest rates low and further cuts expected, the economy is still a fundamentally sound environment for small business.

"Following the Government's recent commitment to enterprise, Britain still remains one of the best places to start and grow a business."