GWENT businesses are prepared to tough it out and invest in their future development despite their uneven economic performance this quarter.

This is the main conclusion of the latest Quarterly Economic Survey, produced by the South Wales Chambers Group.

Contributing to the British Chambers of Commerce economic indicator, the survey reveals an 11-point overall fall in domestic sales, and a 15-point fall in exports for services sector companies. Manufacturers have seen domestic sales drop by 14 points and export sales fall by 12 points to a negative balance.

Despite this, 66% of manufacturers have taken steps to recruit in the last three months, the highest level since December 2000. Plans for increased investment in plant and machinery show a five-point lift and a 11-point increase in training investment.

Likewise, the service sector posted a 7% increase in investment plans for plant and machinery and a 10% increase in plans to invest in training.

Set against the continuing messages of poor economic performance and pessimistic growth forecasts, the Chamber believes that these are encouraging signs.

David Russ, chief executive of ngb2b (Newport and Gwent Chamber of Commerce) said: "Although a less than positive set of economic indicators, these findings are better than expected. What is positive is the commitment shown by Welsh industry to invest in its future. This bodes well for the sustained economic development."

* More than 2,000 new businesses - a third in Newport, Cardiff and the Valleys - have been created in Wales with Welsh Development Agency assistance in the first half of this year - an increase of over 60% compared with same period last year.

The WDA's half yearly report to the Assembly records that a range of Agency services helped 2,025 new ventures get started.

The figure represents a sharp increase over comparable figure for the same period of the previous financial year, which was 1,244.

WDA chief executive Graham Hawker said: "There is a growing trend for new jobs in Wales to be created on a smaller scale but of an increasing quality.

"This reflects the shift to a knowledge economy, increased support for our small and medium-size businesses and the increased targeting of investment in key growth sectors in Wales and from overseas."