Leeds has a long legal tradition

The figures illustrate a sharp decline in export sales for the manufacturing sector, but perhaps even more worrying a slowdown in the service sector, which is increasingly Leeds' bread and butter.

In the last quarter of 2001, less than one third of manufacturers reported that they were working at full capacity.

Export sales for manufacturers and the service sector fell by more than 16%, on the previous quarter, while export orders fell by 7% for manufacturing and 9% for the service sector.

"It is worrying that we have seen a decline in the service sector confidence levels and activities for the first time in a considerable period.

"We do hope this will soon be addressed."

Knightsbridge of the north

That interview was two weeks ago, but Thursday's figures from the Office for National Statistics reflect Leeds' position.

It showed that manufacturing output year on year was 6.4% lower than December 2000 - the largest fall since August 1991.

Unlike Bradford and Newcastle, Leeds has never concentrated its business on one sector of the economy.

Its industrial heritage is a mixed bag of mills and tailoring - Burtons and J Hepworth & Son, now Next, come from Leeds, along with presses and engineering.

It has a strong tradition in financial services, the building society movement and, in particular, legal services.

GE Capital, one of the biggest credit card companies in the world, is connected to the city

Now these industries must face the challenges of the strength of the pound, introduction of the euro and the market forces of the 21st century.

Knightsbridge of the north

John Richardson is director of Corporate Financial Services at law firm Eversheds and chairman of the Leeds Financial Services Initiative.

Millennium Square ice rink

He moved to Leeds from London in 1984, and says that the city has transformed dramatically during that time.

"People never came into Leeds for an evening.

"But it has been transformed because you have got an increasing number of professional people and by their nature they demand sophisticated services."

His comments are in evidence within the city centre.

One of Leeds' new office blocks

Where tailors and presses - Leeds' industrial heritage - stood, are now gleaming offices filled with some of the biggest names in financial services.

Cloth caps and pigeons, traditionally Yorkshire stereotypes, have been replaced by shops, trendy bars and nightlife.

Leeds' trademark - "Knightsbridge of the North" - coined after Harvey Nichols set up ties first branch outside London is perhaps a little tired.

But the six shopping centres and host of arcades are a long away from what the Russian born refugee Michael Marks, co-founder of Marks & Spencer, must have experienced when he opened a stall at Leeds' Kirkgate Market in 1884.

Financial services

Mr Richardson is proud of the city's diverse economy - and says the city has worked well to promote the centre into the second largest financial services centre in England.

John Richardson

"The economy is quite well spread. It has never over-relied on one sector.

"There are now support services, consultant, engineering, media companies, an internet quarter. Generally, any sort of service sector is here."

But even Leeds' diversified economy, which its businessmen are proud of, is not immune to the concerns about the strength of the pound, and 21st century market forces.

Around 100,000 people now work in the financial sector, equivalent to about 23% of the population.

An estimated 38,000 new jobs will be created in Leeds over the next ten years, and most of those will be part-time and in the financial services sector.

Harvey Nichols opening

Mr Mansell is concerned that there could be a danger of over relying on financial services.

"We have never been dependent on one particularly sector in the past. It is a strength it is high value added and makes a valuable contribution to the economy. We have just got to make sure it remains buoyant."

"We must not be complacent."