BUSINESS confidence and turnover in Darlington were depressed during June, according to the latest business index.

The gradual growth in confidence since the turn of the year came to an abrupt end last month, which is reinforced by the results of a quarterly economic survey carried out on behalf of the North East Chamber of Commerce.

Peter Hogan, tax partner at Clive Owen & Co, in Darlington, who prepared the index, said the survey showed optimism about future growth had faded.

He said: "This makes it even more imperative that the Government maintains an atmosphere of stability and favourable economic conditions."

Mr Hogan said the decline in turnover for the second month in succession was almost certainly a consequence of the holiday period. While employment levels in June are on the increase, the news is dampened by worrying results from a recent survey carried out by NatWest's advice service, Mentor.

Almost 60 per cent of small businesses in the North-East are either trying to reduce the number of people they employ or avoiding recruitment of staff because of the increased burden of regulatory compliance.

Mentor states that an average business spends 29.1 hours a month completing the necessary employee-related paperwork.

But Mr Hogan said there was positive news for Darlington businesses in the health and social care sector, because West Midlands-based Windsor Recruitment had invested £15,000 in a branch in the town's Imperial Centre.

Simon Bostock, manager of the Darlington team providing childcare, social workers and qualified nurses to the region, believes the town has a lot to offer in terms of its cost-effective business rates and its location.

The index assesses local business activity based on figures filed by a selection of companies in the Darlington area over the course of the past month. The business index figures compare and assess current business performance with previous months