The Sussex economy is continuing to grow slowly despite the effects of September 11 and the global economic slowdown.

The latest research from Sussex Enterprise shows the county is performing well despite huge job losses in and around Gatwick at the end of last year.

Director of policy and chief executivedesignate Mark Froud said: "Although the Sussex economy is performing steadily at the moment we need to increase our productivity.

"Sussex desperately needs to improve the transport infrastructure and the quality and availability of sites and premises for business.

"We need fresh investment in workforce skills, equipment and technology.

Unless something is done, the Sussex economy will not be able to grow as quickly as businesses need."

Brighton and Hove was the powerhouse of the economy in Sussex last year, with an estimated growth of 3.8 per cent compared to 2.7 per cent growth for Sussex as a whole.

This was mainly down to the strong performance of the financial services sector, retail and the creative industries, which account for much of the employment.

However, there was evidence of growing constraints and the city's economy is forecast to grow by only 2.3 per cent this year, behind the Sussex average of 2.4 per cent.

These constraints are caused by rising house prices, low average wages and a lack of suitable office and industrial property.

Mike Cook, area director for Sussex Enterprise, said: "We need to be careful the restraints don't cause us to lose out on opportunities that could bring further prosperity to the city."

The findings were reinforced by research from business advisors at BDO Stoy Hayward who said the Sussex economy was picking up pace, fuelled by rising confidence and healthier order books.

Service sector companies were emerging from a sluggish winter with the output index up from 98.7 in April to 99.7 last month.

Business leaders were becoming bolder in their outlook.

Order books indicated sustained recovery The BDO index of growth two quarters ahead rose from 99.2 in April to 99.8 last month. The service sector demonstrated the positive outlook with its index moving up to 98.3 last month from 97.8 in April.