THE announcement by one of East Lancashire's most successful companies that up to 40 jobs may have to go is a stark reminder of the problems faced by Britain's small firms because of the strength of the pound.

The managing director of Church-based Emerson and Renwick, which sells its machinery throughout the world, warned that manufacturing in the area was now in 'dire straits.'

His fears were backed by the Confederation of British Industry which forecast that the prospects of smaller companies will continue to deteriorate, with the strong pound sending export orders tumbling.

It is easy to understand the frustration of British companies which appear to have got everything right, only to find that their products are 25 to 30 per cent more expensive than those of their foreign competitors, purely because of the strength of the pound. There is little they can do as overseas businessmen take full advantage of the situation and fill their order books.

Industrialists in East Lancashire estimate that during the last 12 months more than 1,000 jobs have been lost in the area because of the sterling situation.

However, it is not all gloom and doom, far from it.

Regeneration of business parks throughout the district has resulted in encouraging signs of growth.

Regeneration chiefs have been working extremely hard to get things moving and their efforts are showing signs of bearing fruit.

Crucially, many companies from other areas are expressing strong interest in moving to East Lancashire.

A few years ago that would have been unthinkable. But the extending of the M65, which led to the formation of a business corridor and the positive attitudes shown by industrialists, regeneration chiefs, local authorities and work forces helped to put East Lancashire back on the business map.

It is no longer a backwater.

And it would not be too rash to expect more positive notes to be hit in the near future.