THE war on terrorism has caused a serious slow-down in the West Midlands economy, according to a leading professional body.

In a survey carried out by the Institute of Directors, almost two-thirds of company directors said business had deteriorated since the terrorist outrages in the United States and almost half said the economy was likely to deteriorate further.

Yet the survey, carried out by e-mail among the IoD's 3,300 West Midlands members, showed 77 per cent of businessmen and women supported the war on terrorism.

Asked if they had seen a slow-down in business since September 11, 61 per cent of IoD members said yes.

But the same percentage also reported the economy had been slowing down anyway over the past three months.

Asked if military action against Afghanistan would damage their business, 46 per cent said it would while eight per cent thought it might actually improve their business.

A further 38 per cent did not know and eight per cent said it would not make any difference.

Asked if they were in favour of the war, however, an overwhelming 77 per cent said they backed President George Bush and Prime Minister Tony Blair's actions.

Regional director of the IoD, Nigel Hastilow, said the survey showed that the uncertainty and apprehension brought about by the war was leading directly to a slow-down in economic activity.

"Our members were seeing an economic slow-down before September 11 and in the immediate aftermath of the outrages in America, decisions simply didn't get made and economic activity more or less ground to a halt for a day or two," he said.

"Since then, there has been a revival but it is weak and patchy. The uncertainty about how long the conflict will last, coupled with the fear of further terrorist attacks in the United States or Britain, suggests there are few signs that recovery will be quick in coming."