Firms under 'tremendous strain'

Spending and the availability of credit have been reduced

The problems with the economy have put businesses in the Highlands, Western and Northern isles under pressure, a development agency chief has said.

Willy Roe, chairman of Highlands and Islands Enterprise (HIE), said falls in consumer spending and the availability of credit were causing difficulties.

The agency has announced initiatives to try and help companies.

These include one-to-one advice sessions, grant assistance and a look at bringing forward projects.

'Difficult times'

Firms involved in export markets such as whisky and those supporting the energy industry appeared to be weathering the storm, according to HIE.

But Mr Roe said: "The economic situation is extremely challenging and businesses in the region are facing very difficult times."

He added: "Factors such as reduction in consumer spending and difficulties for businesses and households in getting credit are putting the business community under tremendous strain."

The warning came as HIE announced the results of its half-year review.

Key projects such as the construction of Health Science and Beechwood Campus in Inverness, plans for a marine science park at Dunstaffnage in Argyll and targets set by European Marine Energy Centre on Orkney were progressing well.