THIS month's Darlington Business Index indicates a slightly more positive outlook, with a rise in confidence for the first time in several months.

The index for March is analysed by Neville Baldry, a partner with Clive Owen and Co, and despite its overall positive nature shows a minor drop in turnover and employees.

Mr Baldry believes the Budget did not bode well for small business.

"Although there were some concessions to small companies in Mr Brown's Budget speech, they were overshadowed by the increase in National Insurance from next April," he said.

"As a result, the Budget is not being welcomed by thousands of small firms throughout the country, particularly because of the increases in employers' National Insurance."

Mr Baldry believes the rise in confidence could be because these measures do not take force until next year, or as a result of Budget items that could benefit small businesses, such as a reduction in corporation tax rates.

From the end of this month, firms with sales below £100,000 can pay a flat VAT rate, removing the need for record-keeping - a measure the Federation of Small Businesses believes will help owner-managed firms.

The index compares business performance with January 1999.