However, the region's economy remains robust despite problems seen elsewhere, the North East Business Barometer found.

The figures, for the third quarter of the year, were compiled by the North East Chamber of Commerce (NECC). It showed a 7% rise in employment and investment in training also grew.

An NECC spokesman said:

"On the whole, the North East economy is still trading well. We are seeing some tightening of belts but employment levels are good and predictions on future turnover are strong."

However, almost two-thirds of those quizzed said they were now more concerned about interest rates than they were three months ago. The issue was identifed as the main obstacle to future growth.