EAST Lancashire's economy has made a promising start to the year, according to a survey undertaken by the Chamber of Commerce and the Royal Bank of Scotland.

But the twin threat posed by the foot and mouth epidemic and the slow-down in the US economy, is starting to cast a cloud over the prospects for business and industry in the area.

Mike Damms, chief executive of the East Lancashire Chamber said the survey had shown that the area was performing better overall than the rest of the North West.

"Manufacturing exports have increased against the North West average and service-based companies are doing better than the region as a whole," he said.

The regional survey said there had been no drop in business confidence and expectations of turnover and profitability were close to long-term averages. Mr Damms, however, said the survey had been carried out before the full implications of foot and mouth had been realised.

"While East Lancashire has not been as badly affected as other areas, there will undoubtedly be consequences for our companies in both the service and manufacturing sectors," he said. "The impact on tourism is well documented, but we must also remember that our manufacturing companies make things for the rural economy. Mr Damms is also concerned about the implications of the US economy.

"East Lancashire manufacturing does export to the USA and we would expect to see that slow down in line with the US economy, " he added.