Although West Yorkshire's finance professionals say they have "a slightly pessimistic outlook" on business prospects for the next 12 months, the slowdown is only gradual.

And Yorkshire can expect increases in both jobs and exports over the next year.

For the first time since it was launched two years ago the Institute of Chartered Accountants in England and Wales/Orange UK Business Confidence Monitor has shown a significant dip in confidence since spring 2004.

The latest quarterly results show the fourth consecutive decline in confidence with the wholesale and retail sector hardest hit but traditionally buoyant sectors such as IT now also experiencing the slowdown.

The decline in High Street spending caused by consumer debt and a flattening housing sector, along with the London bombings, were the key factors, said the ICAEW.

In Yorkshire the picture is somewhat more gloomy than elsewhere with finance experts attributing a bigger slowdown to the "struggling" manufacturing sector. However, they are expecting "stable growth" for employment, capital investment and exports.

The institute said it expected the number of jobs to grow by 1.8 per cent over the next year and exports to grow by 3.6 per cent - higher than elsewhere in the UK.

Over the past 12 months inflation has risen more slowly in Yorkshire than elsewhere, rising by 1.2 per cent compared to 1.9 per cent nationally.

David Dickson, chairman of the ICAEW small and medium size enterprise group in Yorkshire and Humber, said: "It is good news that capital investment growth is felt to be stable, as is export growth. One of the more worrying findings from this latest Business Confidence Monitor is the feedback that 43 per cent of local finance professionals feel late payments from customers are increasing.

"This is the highest level in any region and compares with a UK figure of 27 per cent. Late payments can blight small businesses and it is an area which needs careful monitoring.

"It is also, sadly, no surprise that 74 per cent of local respondents cite regulatory requirements as having worsened this year compared with last year - another burden on the small businesses which are the life-blood of our regional economy. This compares with a national figure of 63 per cent."

Jane Broadfoot, ICAEW regional manager for Yorkshire added: "It is disappointing that two fifths of our regional financial professionals are less confident than in the previous 12 months. The good news is employment is still forecast to rise and at a higher rate than in the last 12 months but disappointing that the availability of non-management labour has become worse, with 25 per cent supporting that view as opposed to just 20 per cent nationally."