The rising cost of raw materials and the threat of competition are two of the major worries facing companies, the latest survey by the Bradford Chamber of Commerce has revealed.

The Quarterly Economic Survey shows that although Bradford firms have been experiencing some difficult economic conditions recently, the overall picture is positive in the shorter term.

Domestic sales and orders were generally up on the last quarter for service sector firms in the Bradford area and the good news was repeated in manufacturing where an increase in capacity utilisation was reported.

However, the figures also show that domestic manufacturing sales were down slightly and service sector export sales declined again in the last quarter.

Firms' confidence is reflected in the survey by increased investment in training, the slight easing of concern over pay settlements and interest rates, and improved turnover and profit expectations for the next few months.

However, this optimism is only cautious as employment levels appear to have peaked and local firms remain apprehensive over the cost of raw materials and the threat of competition.

Judith Donovan CBE, President of the Chamber said: "Whilst on the one hand it is reassuring to learn that service firms have reported domestic sales growth again, and manufacturing based exporters have shown another rise in sales and orders, it is equally disappointing to find that service sector exporters have encountered a particularly difficult period

"This mixed picture does indicate just how varied the levels of success from one quarter to the next can be due to the difficult economic conditions that businesses have been experiencing.

"We can see from this survey just how volatile the market is at a time when what is needed is sustained growth.

"Positive action from the Government would help and lowering interest rates would be the right starting place!"