In the world of Celtic Tigers the Northern Ireland economy has rarely rated as much as a cub. Although there has been little of the spectacular annual growth rates seen south of the border, the North's economy has been doing well for a long time.

Indeed, it has once again risen to the top of the UK league table of economic growth, at least in job creation.

Over the past 10 years employment has expanded by 19 per cent, well ahead of the UK average of 13 per cent, and a fraction ahead of South East England, the next best performer. An additional 125,000 jobs have been created in Northern Ireland, making this the best decade ever for jobs.

GDP data are less up to date for UK regions, but our estimate is that growth in Northern Ireland has averaged 3.2 per cent over the past 10 years. This is a little below the level in London and the South East, but well above all other parts of the UK.

Across the UK as a whole, 2003 is proving a difficult year. While the fall of sterling against the euro has given exporters some relief, depression in many EU markets has meant that exports remain in the doldrums. Consumer expenditure, buoyed up by equity withdrawal from still surging housing markets, continues to provide the main support for economic activity. Recently revised GDP data have, however, raised growth estimates, and are leading to an upward revision of forecasts for this year, to around 2 per cent.

Northern Ireland is doing well in this restrained UK context. Our estimate for 2003 is GDP growth at 2.5 per cent, still well ahead of the UK average. Moreover, our forecasts suggest a continuing good performance as the UK economy picks up once more. Manufacturing is well placed to gain from recovering international markets, with more R&D-based activity than formerly, and the crucially important financial and business services sector is much larger than five years ago.

Why has Northern Ireland been doing well? The first point to make is that a good growth record is not new. Northern Ireland has been close to the top of the UK growth league for much of the past 30 years. While the early, catastrophic years of the 'troubles' destroyed some industriesand led some to relocate, from the mid- 1970s growth resumed at something close to UK rates.

The period since the mid-1980s has been one of almost continuous expansion with the creation of 200,000 extra jobs, with three-quarters of these in the private sector.

Some of this has been a delayed catch-up in the long consumer boom starting well before the cease-fires of 1995. The retail and wholesale distribution sectors have thus seen huge growth with the arrival in Northern Ireland of most of Britain's major supermarket and retail chains. The expansion still continues, with Lidl and Mazatlan involved in major investments and Debenham and Next also expanding.

The figures suggest that distribution activity is now close to the UK average. Continuing population growth will ensure a growing market, but not at the rates of recent years. We also expect a slowdown in consumer spending across the UK, including Northern Ireland, as debt acquisition begins to slow and interest rates rise once more.

Tourism remains depressed as the bad publicity from the Drumcree marches and the Holy Cross school debacle prevented the industry from benefiting much in the post cease-fire period. It is true that a boom in hotel building has occurred, but most of this has been in central Belfast and Derry, serving business markets.

The main rural areas with strong tourist potential remain hugely under-represented in hotel accommodation and this situation is unlikely to change radically until the political situation improves.

Northern Ireland is currently gaining from the UK-wide public expenditure boom. This is expanding the public sector by over 2 per cent (6,000 jobs) this year. However, the boom will slow from next year. Although an important boost to growth, especially in this year of manufacturing retrenchment, the public sector has not been a major driver of growth in two decades.

What differentiated Northern Ireland from other UK regions until recently was the strength of manufacturing. Manufacturing output has generally risen 3 per cent faster each year than the UK average irrespective of the macro-economic context.

However, the environment has been very difficult for three years. The end of the high-tech boom hit electronics producers like Nortel, and post September 11th aviation problems continue to dog the Bombardier aircraft operation at Shorts.

These difficulties are likely to improve next year but other difficulties are ongoing. Most jobs are currently being lost from textiles and clothing as the industry continues to relocate production to low-cost Third World countries. This sector was heavily supported during the years of the 'troubles' and remained larger than warranted by the true economic position. It has lost half of its jobs in five years and continues to decline.

The good news is that replacement activity is being steadily generated. The software sector is now larger than textiles and clothing, and the call centre industry has grown rapidly since the threat of disruption from bombing was removed.

The author is a former adviser to the First Minister of Northern Ireland and currently a director of Regional Forecast Consultants in Belfast. This article is based on a speech delivered at the 8th Northern Ireland economic conference this week.