The Sussex economy is strong enough to recover from the current slowdown in world trade.

A Brighton economist predicts the county will avoid a slump in 2002, despite the recession in the United States, Japan and parts of Europe.

Danny Knapp, corporate finance partner at the Brighton office of BDO Stoy Hayward, said research pointed to tough times ahead but the UK was likely to fare better than most.

He said: "Our latest poll of polls, pulling together the results of all the main business surveys, showed Sussex and the UK economy was set to avoid recession in 2002.

"While the economic dangers are very real, the UK is in a relatively good position with demand better underpinned than that in other world economies, interest rate cuts are bolstering consumer expenditure and Government spending is rising rapidly.

"Sussex's strong economic performance in relation to the UK's average may slip as trading conditions in different parts of the economy are mixed.

"The boost traditionally given by the air travel, finance and the business services industries was negated by the clear impact September 11 has had on them.

"Positively, the Sussex economy has more of its workforce operating in the service sector than in the UK nationally and our index shows the sector reporting a better order book position in October than in July.

"Technology and telecommunications companies, in which Sussex has a greater proportion of its employment and which felt the slowdown most painfully in the first eight months of the year, should start to rally in the next half-year, further developing the local economy."

Other data from BDO re-inforced the view the UK will escape the worst.

The company's output index, which correlates closely with GDP movements one quarter ahead, slipped only a tenth of a point from 99.3 in July to 99.2 in October.

Order books for the next few months looked healthy enough to sustain businesses in the majority of sectors.

Growth was expected to be a modest 1.7 per cent in the first quarter of next year, down on previous figures.

For growing businesses, the sharp drop in share prices of the past 18 months has blocked hopes of raising money from the stock market. But private equity firms with large independent cash reserves, have taken up some of the slack.

Short and long-term borrowing rates are at a 20-year low and companies using floating-rate debt should see their servicing costs fall even further.