FIVE thousand East Lancashire jobs could be axed this year amid the country’s growing financial crisis, business leaders fear.

But Mike Damms, chief executive of the East Lancashire Chamber of Commerce who made the prediction, said even that figure meant the area might not be as badly hit as others.

Experts predict as many as 600,000 people could be made redundant across Britain by the end of the year.

And it is feared that thousands of workers across East Lancashire will be laid off as businesses struggle to deal with the worldwide economic downturn.

Business leaders expect firms to make job losses throughout the year as the economy “bottoms out” and bosses look to cut costs.

Last month official figures showed that 10,628 Lancashire people were claiming unemployment benefit in November, an increase of 3,644 on the previous year.

The last Census in 2001 found a total of 617,565 Lancashire residents aged 16-74 to be in employment. A total of 446,049 or 72.2 per cent were employed in the service sector while a further 118.028 or 19.1 per cent were in the manufacturing sector.

Mr Damms sounded an optimistic note, particularly with the area’s strong manufacturing links with the defence sector.

He admitted job losses this year could hit 5,000 but said he was “relatively less pessimistic”.

But Mr Damms stressed: “In East Lancashire, we have a large proportion of public sector jobs - something like 25 per cent - and then we have the people in manufacturing.

“Manufacturing jobs themselves are holding up and our economy is not as vulnerable because we don’t rely on car manufacturing as much.”

However a union leader gave a contrasting view and predicted the area’s manufacturing base would be “hammered” in 2009.

Graham Coxon, a GMB representative for the area, added: “I am not optimistic at all. I am pessimistic because most companies linked to manufacturing are struggling.

“This started for us back in September and we knew then what was happening. Companies were laying off staff.

“There is nothing at all to be optimistic about. Manufacturing it at its lowest level for years and I cannot see it getting any better. It is going to be a bad year.”

He called on the Government to offer businesses bigger VAT cuts than the 2.5 per cent introduced last year and demanded other tax deals for firms.

Three council leaders sounded an optimistic note and said East Lancashire was well placed to dodge the worst of the worldwide downturn.

Incoming Blackburn with Darwen Council leader Mike Lee said: “A lot of what we will do as a council will be longer term. It is a bit of a grin and bear it situation but we will help where we can to get over this crisis of confidence.

“If there are grants available we will point businesses in the right direction and we will offer advice where we can, although we are not in a position to offer financial help.”

Gordon Birtwistle, leader of Burnley Council, added: “We are not totally insulated from job losses but thankfully we have got manufacturing jobs that will hopefully be able to carry us through this recession.

“There’s not a great deal we can do as a council except promote the council to people like the North West Development Agency and try to get money from them.”

And Rossendale Council leader Tony Swain said: “The council is not a bank so we cannot help there but we will do anything else we can.

“I don’t think massive jobs losses are inevitable and I think in a few months time things will turn round.”

The Chartered Institute of Personnel and Development has predicted that 600,000 UK jobs could go in 2009.