UPBEAT business people in the North-west do not believe that the predicted downturn in the economy will turn into a full-blown recession.

Managing directors of small and medium-sized enterprises in the region were quizzed by The Royal Bank of Scotland Commercial Services.

Seventy-nine per cent said they did not believe there would be a recession this year.

In addition 74 per cent of the 500 MDs questioned were optimistic that their business would continue to grow.

And almost half (44 per cent) said they would be investing financially in the growth of their business.

Government red tape did not seem to be a problem in this survey.

Eighty-six per cent did not believe that European directives on pay and working hours would be a burden on their business and the same number of respondants were unconcerned about the introduction of Stakeholder pensions in April.

Other key findings were:

31 per cent expected to be involved in a recruitment drive this year.

49 per cent are planning to invest in technology.

37 per cent are introducing more benefits in a bid to retain staff.

Mr Peter Torrance, Marketing Director of RBS Commercial Services, said: "Despite predictions amongst some economists that 2001 could see the start of a UK recession, SMEs disagree.

"They believe that business is good enough for them to invest in new staff and technology and to finance growth.

"Managing directors, however, do need to keep a close grip on their cashflow and should ensure that when they are making investments that they don't overstretch themselves.

"They should consider using invoice finance to ensure a steady cashflow."