The picture for Bradford's economy is more upbeat and optimistic than that of the rest of Yorkshire.

This was the message from Yorkshire Bank's chief economist Tom Vosa as the bank published its quarterly economic survey.

The survey also showed that the gap between growth in Yorkshire and the rest of the UK is expected to narrow in 2007 as the performance of the region's economy continues to improve as a whole.

Mr Vosa said: "All in all Bradford's picture is more upbeat than the Yorkshire average.

"The housing market is very active in terms of investment in new developments and the ongoing regeneration situation.

"Increasing levels of investment from mean that the situation is rather stronger then elsewhere.

"Manufacturing in Bradford tends to be more in niche markets, meaning that players are able to do extremely well where there is little competition."

The survey as a whole predicts a national economic growth of 2.75 per cent for 2007, compared with 2.5 per cent in Yorkshire.

The report claims that growth in the region has remained at modest levels during 2006, with improved activity in the third quarter - particularly in the service sector.

The Yorkshire manufacturing sector reported a growth in efficiency levels and capacity meaning orders are being processed more swiftly.

However margins are being squeezed as input costs have risen at a higher rate than firms have been able to rise prices.

The survey also reports that employment levels are falling in both the manufacturing and agricultural sectors and job numbers in Yorkshire are increasing, though rate is not as fast as that at which the workforce is expanding.

Unemployment increased from the low in early 2005 to six per cent, 0.5 per cent higher that that of the UK average.

Mr Vosa added: "A point that always bears repeating is that the relatively weak performance that the economy in Yorkshire has seen recently comes only after a number of years in which it out-performed the rest of the UK.

"Our findings suggest the region's economy is still strong and will continue to grow - albeit not at the rates seen in the last few years."