Confidence strong despite turnover fall

News that the employment figure was down on last month came amid reports that the Calsonic Kansei factory, in County Durham, was to close, putting the jobs of 200 workers at its Shildon site in jeopardy.

Tony Luckett, a partner at Clive Owen & Co, chartered accountants and business advisors, who compiled the business index, said it was depressing news for the region's manufacturing industry.

Figures produced by the Office for National Statistics showed manufacturing output falling by 0.3 per cent between February and March.

Mr Luckett said: "This, coupled with the rise in interest rates by the Bank of England to 4.25 per cent, could put additional pressure on Darlington manufacturing plants competing with those using cheap labour overseas."

Despite the fall in turnover and numbers of employees, the confidence figure remained positive for Darlington businesses.

David Hodgson, engineering director at AMP Consultants, in Darlington, believes the rise in business confidence in his sector could be a result of the increase in steel prices at Corus.

Mr Hodgson has noticed a surge in quotations becoming orders, with decisions being forced by Corus' intentions to increase the price of steel even further in coming months.

Furthermore, UK Steel, the trade association, estimates that worldwide scrap prices have increased in recent months by 40 per cent, iron ore by 20 per cent, dry bulk shipping rates by 75 per cent and nickel by more than 100 per cent.

He said: "With much of Darlington's redevelopment relying on the price of materials remaining close to quotations received in the planning stages, the demand for steel in the North-East could certainly increase in coming months."

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