THOSE with hands at the tiller of businesses in York and North Yorkshire are cautiously sailing "steady as you go" through slightly choppier waters into 2005, their spinnakers still billowing from last year's winds of fortune.

That's the nautical view of Len Cruddas, pictured, chief executive of the York and North Yorkshire Chamber of Commerce, which represents more than 700 businesses across the region.

He said: "With the housing market falling off, depressed consumer confidence will work its way through the system beyond retail to manufacturing and affect the supply chain.

"But it is more flatlining than a drop - and in any event there is always a dip after Christmas when people recover from spending."

There was an expectation that interest rates might go down, but certainly not up. "The fact that they appear to have peaked means that there is one less negative factor."

On top of this, exchange rates seemed fairly stable with a weak dollar, strong pound and Euro doing well. "That's not good news for exporters and manufacturers for export, but we have been used to a strong pound for some time now and there is no sense of impending change," he said.

"So it's steady as you go, but from a good starting position, because it's been a good year generally, although I appreciate some individual firms might not agree with that." But there is a strong indication that manufacturers in Yorkshire are particularly uncertain. The Engineering Employers Federation (EEF), which represents 400 of the region's top manufacturers, is now wary, even though some ventures have been doing well.

A final 2004 quarterly survey carried out by the EEF shows that although output is growing, optimism seen earlier last year has been replaced by worry about a possible downturn.

The survey, taken last November, shows that order intake from the UK was still growing but the growth had slowed. Export orders, stable in the previous quarter, had declined with more firms reporting a fall than a growth in orders.

Ian Hughes, director of the EEF Yorkshire and Humberside, said: "While prices are largely stable, the pressure on margins has increased. This reflects continuing increases in steel prices and the cost of energy, especially gas. The EEF has already called for an inquiry into wholesale gas prices."

He was concerned that companies now expected both orders and output to decline. "Given that expectations in these surveys are almost always over optimistic, this is a clear warning signal to the government and Bank of England not to do anything which could push manufacturing into recession."

Updated: 09:41 Friday, January 07, 2005