WAR with Iraq is having ramifications for the region's business community, and a fluctuating Stock Market.

Already North-East companies working in the Middle East are having to put contracts on hold and withdraw their personnel, as a result of the ongoing hostilities.

The increasing price of raw materials, in particular the fluctuating oil price, is putting some of the region's businesses under increasing pressure.

But others, particularly those in the civil engineering and construction fields, could be looking forward to the end of hostilities, with the hope of winning contracts to rebuild Iraq's infrastructure.

Meanwhile, fading hopes of a quick end to the hostilities have hit the Stock Market.

Jeremy Batstone, of Natwest Stockbrokers, said: "Pictures of hostages don't tend to do much for investor confidence. The market's steadfast prediction so far has been that it would be quick and relatively painless."

At the close of trading last night, the FTSE-100 had taken another hammering, falling 117.8 points to 3743.3, as hopes for a relatively quick end to the conflict evaporated.

Rachel Spence, head of policy at the North-East Chamber of Commerce, said a number of its members had expressed difficulties with the current situation.

She said: "We have numerous members who have been working on contracts, or waiting to start new contracts in the Middle East.

"As a result of the current conflict, some substantial businesses are having to delay contracts, or withdraw staff from the area altogether.

"Other companies, particularly those in the polythene and oil product sectors, are being hit by the rising and fluctuating price of raw materials."

She said: "However, for companies involved in the defence sector, the experience is exactly the opposite, as one would expect."

One company which believes it is well placed to play a part in rebuilding Iraq after the conflict is Glasgow-based engineering group Weir, which has a pumps operation in Billingham.

It currently derives about eight per cent of its turnover from the Middle East.

A spokeswoman for the company said: "Weir is well positioned as and when contracts for rebuild work in Iraq come up for tender."

However, Ms Spence added: "It is too early to say when the conflict will end and what involvement the region's companies will have in the rebuilding of Iraq's infrastructure."