CONFIDENCE among Darlington employers was boosted by low unemployment figures in February, the latest business index shows.

The positive trend in January continued into February with significant increases in turnover and business confidence.

Numbers of employees in the town rose for the fifteenth month, in line with the release of the region's monthly unemployment figures, which showed the number out of work fell by 2,000 last month, bringing the unemployment rate down to 6.3 per cent.

Peter Hogan, tax partner at Clive Owen and Co, chartered accountants and business advisors, said: "The Budget speech contained few surprises, predictably, due to the forthcoming election.

"Manufacturing businesses in Darlington and the surrounding area were no doubt relieved that there were no changes to harm their industry - but neither could they be encouraged by any measures to help their recovery.

"Gordon Brown predicted that manufacturing will grow by two per cent in the coming year, although the state of the industry is still fragile."

Mr Hogan said the "sting in the tail" in the Budget, which was a 19 per cent tax on dividends for small limited companies, would hit Darlington businesses hard.

All the town's incorporated businesses with profits of up to £50,000, and which pay dividends to non-corporate shareholders, would be hit by the rise, he said.

Mr Hogan said: "It will be interesting to see how this tax will be implemented next month, as there could be more legislation hidden in the small print.

"Much will be revealed in the Finance Bill, which should clarify the effect on small businesses in the long run."

He said he welcomed announcements about tax credits for businesses investing in research and development, and the fact that the Chancellor had said he would include expenditure on software, power, fuel and water as qualifying costs for the tax credit.

"According to Government statistics, this could help a total of 95 businesses in the North-East," said Mr Hogan.

The business index is compiled by Clive Owen & Co and assesses local business activity based on figures filed by a selection of companies around the Darlington area over the course of the last month.

The business index figures compare and assess current business performance with previous months.