TURNOVER and employee numbers have increased for the third successive month.

However, this pattern is not matched in terms of business confidence - which has fallen for the fourth time since September in and around the Darlington area.

But the quarterly business barometer survey from the North-East Chamber of Commerce showed that 2005 ended well - boosting confidence for the year ahead.

The latest business index for the area has been evaluated by Peter Hogan, tax partner at Clive Owen & Co, chartered accountants and business advisers. He said the service sector still appeared more confident than manufacturing.

"How this will all affect our figures remains to be seen, though it would be a welcome change from the negative trends we have reported in recent months," he said.

There are several positive trends at this stage of the year. In Darlington, there have been product launches and improved training.

Mr Hogan said: "This shows how local businesses are attempting to bridge the skills gap that the Confederation of British Industry often highlights.

"One local business committed to increasing skills levels is former teacher Jennifer Wilson, who has set up Spelling Logic to overcome bad spelling in the workplace."

Long-term unemployment seems to have stayed constant over the past year and, although there has been growth in the job market, there is still difficulty in joining the labour market.

Darlington's only plc, Northgate, has reported slower market conditions in the UK construction, retail and distribution sectors.

However, in the spirit of goodwill, the company is celebrating 25 years in business by donating a free van to a local charity each month.

Mr Hogan said: "This is definitely a sign that there is a positive future ahead.

"Also many high street retailers have reported a positive Christmas period. Inflation is finally falling to the target rate for the first time since June, so 2006 has not had a disappointing start."

l The index assesses local business activity based on figures filed by a selection of firms in the Darlington area over the course of the past month. The index figures compare and assess current business performance with previous months.