HUDDERSFIELD is set to share in a recovery of the Yorkshire regional economy, says a report today.
Figures from the Yorkshire Bank showed that the regional economy grew by 1.6% last year after a 2.1% increase in 2005.
But the bank is predicting a 2% improvement this year, rising to 2.2% in 2008.
An expansion of the service sector is expected to lead the rise.
Yorkshire Bank economist Tom Vosa said: "Yorkshire was the envy of most regions in the first half of the decade, with above-average growth that could not realistically be sustained in the long term.
"Against that backdrop, its current performance is robust and reflects the continued vitality and diversity of the region."
Mr Vosa said firms continued to report rising costs, but were also improving profit margins.
Manufacturers were reporting strong order books at home and overseas, although unfavourable exchange rates were a constraint on exports.
Despite an increase in spending on plant and machinery by firms, unemployment was expected to rise from its current six-year high of 6% as job creation proved sluggish.
The building industry had slowed with a drop in public sector spending on major projects.
Mr Vosa said consumer spending was also likely to fall as people put more of their money into paying debts.
The housing market was also expected to slow down as prices stabilised.
Nationally, the bank forecasts a 2.75% growth rate for both 2007 and 2008, following a rate of 2.7% last year.
The report follows a survey by specialist economic development consultancy Regeneris showing a narrowing of the prosperity gap between the South-East and other UK regions.
The survey said Yorkshire was eighth out of nine regions when measured solely on household income.
But the region came fourth when the `true' costs of wealth production were taken into account, factors such as the cost of living, congestion and commuting and quality of life.