A NEW economic report reveals a glimmer of hope for the North-west.

The North West Chambers of Commerce quarterly economic survey shows continued deterioration in the fourth quarter of 1998.

But it reveals that export markets are showing the first glimmers of recovery with an easing of the steep decline seen in previous quarters.

The survey, by the Royal Bank of Scotland, also shows that the fall in cashflow has stabilised, confidence in rising turnover has improved and, as a result, investment intentions have improved.

But manufacturing orders and deliveries continued to decline at home and there were no signs of recovery in the service sector.

Sam Jones, chairman of the North West Chambers economic committee, said: "At the end of 1997 the survey gave the first signs of a significant downturn, which was proved correct.

"This quarter, the survey shows the first tentative indications that the decline may be slowing as exporters in particular take advantage of lower interest rates and a weaker pound.

"However, there are still difficult times ahead and some uncertainties to face."

Richard Taylor, deputy chief economist of the Royal Bank of Scotland, said the few positive signs in manufacturing were welcome and began to suggest that the current downturn might not be as deep or as long as that of the early 1990s.

"The risks are still on the downside, particularly given the fragility of global conditions, highlighted by events in Brazil. However, if the world situation holds, we hope to be reporting a very different story by this time next year."

Peak

The survey also shows that the proportion of companies working at full capacity rose slightly in the fourth quarter of 1998.

But this was probably due to increased efficiency rather than increased demand - and the figures were much lower than their peak a year ago.

In manufacturing, 51pc of companies tried to recruit staff, compared with 60pc in the third quarter. In the service sector, 54pc tried to recruit, compared with 62pc last time.

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