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

And in an added boost, business closures were down by eight per cent year on year.

However, 99,700 businesses still closed in the first quarter of the year.

The number of businesses trading at the end of March, 2002 stood at 2.71 million, only 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.

However, 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 rose to eight for every 1,000.

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 the national average, with 14 new businesses for every 1,000 adults of working age.

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 when looking at the number of mainstream businesses.

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

He added: "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."