Bradford Chamber of Commerce and Industry says its members are suffering mixed fortunes.
The results of the Chamber's latest economic survey, which is published quarterly, revealed a slight upturn for manufacturers.
But, the survey found the district's service sector is having difficulties which have led to a loss of confidence and falling investment.
John Pennington, president of the Chamber, said: "It's a relief to see that manufacturing may be recovering finally, but disappointing that the service sector has continued to report a worsening trend.
"Anyone hailing manufacturing's recovery, though, should be cautious, as we've had false dawns before.
"There has been an increase in concern over business rates, which seriously needs addressing by local politicians and let's hope that central government can get to grips with regional disparities and so help bring fresh investment into areas like Bradford."
Home sales for manufacturers held steady, with orders up 11 per cent.
The service sector reported a fall in both sales and orders, by five per cent and eight per cent respectively.
Manufacturers in the district saw a reversal of fortunes in foreign markets from the recent decline in sales with orders up ten per cent.
Mike Cartwright, the Chamber's policy executive, added: "Let's hope that interest rates stay low for some time to come and that the international economy has got over the worst of the global recession."
The Chamber has around 1100 members from all sectors of the local economy.
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