A SLOWDOWN in the UK economy may have been impacted by global hesitancy - and also uncertainty over the outcome of the EU referendum, one of the north's leading economists said yesterday.
Dr Esmond Birnie, PwC chief economist in Northern Ireland, was commenting on provisional data released from the Office for National Statistics (ONS) which showed the UK GDP grew by just 0.4 per cent in the first three months of the year.
That was down from 0.6 per cent in the final quarter of 2015, setting annual economic growth at 2.1 per cent.
And while the service sector, currently the biggest component of the UK economy, grew by 0.6 per cent, construction output fell by 0.9 per cent in the first quarter and production, which includes manufacturing, declined by 0.4 per cent.
The data, while provisional, confirmed that services were continuing to underpin the economy, Dr Birnie said.
"The UK economy hit a soft patch in early 2016, reflecting uncertainties about the global economy, which hit manufacturing exports, but the business and financial services sector also slowed from 0.7 per cent in the final quarter of 2015, to just 0.3 per cent in the first three months of 2016," he said.
"Uncertainty about the outcome of the EU referendum outcome may also have had an impact by delaying some major investment decisions, partially accounting for weak construction output in the first quarter.
"The Bank of England has also cautioned that uncertainty around the EU referendum could impact growth in the first half of 2016, so the three months to the end of June could see continued sluggish growth."
However, on a brighter note, Dr Birnie pointed to "some easing of concerns" about the global economy and said there were reasons to "remain cautiously optimistic" that the UK could rebound in the second half of the year.
"For Northern Ireland, that would tend to confirm our earlier forecast of slower recovery in 2016, where we are anticipating growth of 1.4 per cent, down from 1.5 per cent in 2015 and significantly behind forecast UK economic growth of 2.2 per cent for all of 2016," Dr Birnie added.
