BUSINESS leaders should brace themselves for an impending economic slowdown in Yorkshire, but York should weather the storm.

That is the prediction of Tom Vosa, pictured, Yorkshire Bank's top economist, who calculates economic growth in the region in 2006 will be lower than the rest of the UK for the first time in five years.

But, he says, while York is likely to suffer like the rest of the region in the construction and retail sectors, it is also likely to benefit from a tourist boom as a weaker exchange rate favours visitors from abroad. It should also benefit exports for manufacturing industry.

The prediction comes in Mr Vosa's latest quarterly Yorkshire Economic Update, which foresees growth in Yorkshire of between 1.5 per cent and two per cent, lower than the UK average for the first time since 2001.

He said: "It is important to put this into perspective. The economy in Yorkshire has performed remarkably well in the last few years and it would have been unrealistic to have expected it to continue at this level.

"Indeed, the slowdown in growth reflects a rebalancing away from consumption and Government spending towards investment and net exports."

Expansion in the Yorkshire economy averaged 3.6 per cent between 2001 and 2004. Figures for 2005 have yet to be published, but Yorkshire Bank estimates it will be between 1.75 per cent and two per cent - only marginally ahead of the rest of the UK.

Mr Vosa said the slowdown is due in part to firms clearing order backlogs and a weakening in new order growth in the last few months of 2005.

He warned unemployment rates were likely to go up, but York would partly be cushioned by its strong tourism sector, although the nature of jobs could be less permanent than they were before.

Mr Vosa said: "Yorkshire has expanded to a large extent on the strength of its construction and service sectors in recent years.

"Things may be easing here, but if a modest rebound in the manufacturing sector can in some way compensate for this, then the regional economy will continue to expand, even if the pace remains rather muted in comparison with the recent past."

Updated: 11:36 Tuesday, January 31, 2006