BUSINESS confidence is on the rise, despite the gloomy economic picture.

According to research from Barclays Bank, business start-ups increased for the second quarter in a row, over the past three months.

The Barclays Small Business Survey for Quarter One found that in the first three months of this year, 95,300 new businesses started trading.

Although the figure is five per cent lower than at this time last year, it was the second consecutive quarter to register growth.

In an added boost, business closures were down eight per cent year on year. However, 99,700 businesses still closed in the first quarter.

The number of businesses trading at the end of March, 2002 stood at 2.71 million, just 4,000 fewer than at the end of the previous quarter.

In the North-East, an average of eight new businesses were started for every 1,000 adults of working age.

That compared to a national average of 11 new businesses for every 1,000 adults.

The number of new businesses started in Durham was six for every 1,000, while in Darlington it was eight.

Elsewhere in the region, Sunderland saw four new business start-ups for every 1,000 adults, with Newcastle having seven and York nine.

Only Harrogate fared better than average, with 14 start-ups for every 1,000 adults.

David Slane, regional small business director at Barclays ,said: "For the first time since September 2000, we have tangible grounds for optimism for new business starts.

"Britain is a nation of entrepreneurs and it seems the economic slowdown may have delayed, but not deterred, people from putting their plans into action.

"I expect to see numbers rise during the remainder of the year provided interest rates do not rise dramatically.

"The economic outlook is more positive and small business owners are clearly sharing that optimism."