Darlington employers are still recruiting, despite a bleak national and regional outlook, according to the latest business index.

The index for May, compiled by Clive Owen and Co Business Advisors, shows that company turnovers and numbers of employees are increasing in Darlington, despite a fall in business confidence.

The lack of confidence reflects devastating announcements by Corus and the loss of 70 jobs at AK Engineering Services, formerly Aker Kvaerner, on Teesside.

Tony Luckett, partner at Clive Owen and Co, said that nationally, analysts had been caught off-guard by the largest monthly rise in unemployment recorded for ten years.

Darlington businesses remain cautious, whatever happens in the forthcoming referendum for regional government and any referendum about the euro replacing the pound.

Mr Luckett said Deputy Prime Minister John Prescott's plans for regional assemblies could be the turning point against the area's rising unemployment.

With more opportunities for the North-East, North-West, Yorkshire and Humberside to have more control over economic development, housing, transport, public health and culture, he said it could also be possible to raise the profile of the North as a viable option for growth and investment.

But it could also bring more bureaucracy and red tape into the lives of regional business owners, many of whom were already burdened with increasing employee rights and taxation legislation.

"It might be good news for home owners that the regional assemblies will have some input into housing development, as recent figures show that fewer and fewer first-time buyers are able to get on to the housing ladder due to soaring house prices," said Mr Luckett.

"The Chancellor, Gordon Brown, highlighted the housing market as one of the key objectives to Britain's acceptance of the euro.

"As the battle over whether or not to embrace the euro continues, some Treasury advisors have quite rightly asked why the Bank of England has yet to cut interest rates to make us more in line with the rest of Europe. The answer is, of course, the housing market."

Despite the uncertain climate, businesses continued to buck the trend by investing in staff.