THE Dales' business community and tourism industry are facing an uphill battle as they struggle to recover from the rural recession.

However, business leaders will be urged to look for new opportunities when they meet in Richmond next week.

A meeting last month was told Upper Wensleydale's economy was showing signs of a marked decline, with trade down as much as 20 per cent over the past four years.

A report compiled for Richmondshire District Council's Business Forum also highlighted a £5m fall in income at Hawes Auction Market.

Even tourism has not escaped unscathed, with a downturn in occupancy rates confirmed by owners of bed-and-breakfast establishments and holiday cottages.

Author of the report and forum member, Dr Peter Annison, said: "They are big problems, which require big solutions."

However, economic, cultural and leisure unit manager at the district council, Geoff Herbert, suggested Dr Annison's report might be the basis for applications for grants from Brussels.

He said: "Solutions need substantial resources.

"The evidence submitted begins to help in making the case for a package of projects, which may be supported by external funding.''

Mr Herbert said despite difficulties facing the Dales economy, there was no hard evidence of spiralling unemployment.

However, he conceded an increase in second and part-time jobs may be keeping the unemployment figures artificially low, and that the market for holiday accommodation could also be nearing a crisis.

He said: "The nature of the farm diversification programme needs careful scrutiny. It is agreed diversification into tourist accommodation must be nearing capacity.

"The way forward must be to develop the core business of agriculture."