CONFIDENCE and optimism among businesses in the North-East remains high but below the national average, according to new research by financial company KPMG.

Confidence among UK small and medium-sized businesses (SMEs) in the prospects for their business has surged to 76 percent - the highest level since the survey began in 2003.

However, in this region the figure stands at 67 per cent, only one per cent higher than the previous survey last autumn, but confidence in overseas trading is at an all-time high.

Almost three quarters - 72 per cent - of North-East SMEs questioned felt that small businesses in the UK were either "competitive" or "extremely competitive" within Europe.

Richard Bottomley, office senior partner at KPMG in Newcastle, said there was a bright outlook for the North-East.

"Our latest survey shows a good degree of optimism amongst SMEs in this region," he said.

"Given the people who answer our questions are businessmen, not economists, the rationale for their answer is based not on analysis of macro-economic trends but the health of their order book.

"So, to see these businesses in confident mood surely bodes well for the future."