Brighton and Hove has one of the country's most buoyant economies, new figures show.

The city has seen a 40 per cent growth in the value of goods and services it produces between 1999 and 2004 - the seventh highest in England, according to the Office of National Statistics.

The boom confirms Brighton and Hove's transformation from a bucket-and-spade economy to a hub for creative, media and IT industries.

But despite the growth, the city still lags behind much of the South East and London in terms of the total value of its economy due to the number of low-paid jobs in the leisure industry.

East and West Sussex feature towards the bottom of the growth league table, recording increases of 26 and 27 per cent.

Brighton and Hove City Council leader Simon Burgess said the figures were proof the city had turned the corner economically. He said: "I am delighted with the figures, especially because it is recognised that seaside resorts have a tougher time than most when it comes to developing the economy.

"Having the reputation of being relatively cool makes a key difference."

Concerns about the departure of one of the city's major employers remains high after a series of high profile exits abroad, but Coun Burgess said the council was working hard to retain companies such as American Express and Legal and General.

Coun Burgess said: "We have been doing particularly well with the creative and media industries but we will have to work hard to keep our major employers here."

A report by economic consultants Tym and Partners, the University of Brighton and property consultants Cluttons urged the council last year to look at the creation of "a city centre office quarter".

In the next 20 years, more than 6,600 jobs are expected to be created in business services, including accounting, architecture and engineering.

A similar number of new posts are expected in "other services," such as new media and IT.

But the investigation also revealed that Brighton's position as an employment centre has worsened over the past decade, partly because of rising house prices.

Mark Froud, chief executive at chamber of commerce Sussex Enterprise, said that Brighton and Hove was developing a booming business sector.

He said: "These figures are great news for Brighton and Hove and prove the city is a fantastic place to do business.

"Brighton and Hove has transformed itself over recent years from a traditional seaside resort into a business-focused new city.

"The past five years have seen it buck the trend from focusing on seasonal activities for its economic activity and employment to developing additional high value added industries such as the financial and business services sector and the highly successful creative and digital media industry.

"What we need to see next is this growth spreading to other areas of Sussex, particularly along the coast."

Jo Brookes, manager of JBPR, one of Brighton's biggest PR companies, said her industry was growing strongly.

She said: "Brighton and Hove is seen as an extension of London now, which is an advantage to doing business here.

"We have also had a lot of celebrities living here which puts Brighton in the spotlight and which has put Brighton on the national map."