Sharp decline in construction drags GDP growth
A STEEP decline in construction output dragged down growth in the UK's economy in the last quarter with the slow down worse than anticipated at 0.5 per cent.
But while steady growth in the UK as a whole is still expected, the prospects are less optimistic for Northern Ireland.
Analysts had forecast that growth would slow slightly from 0.7 per cent in the second quarter to 0.6 per cent in the three months to September.
Figures from the Office for National Statistics (ONS) showed the services sector continued its strong performance, growing 0.7 per cent in the period, but was partially offset by a worrying 2.2 per cent decline in construction output.
It was the biggest quarterly fall in construction for three years.
Manufacturing continued to struggle as it fell by a more moderate 0.3 per cent, while mining and quarrying increased 2.4 per cent.
Dr Esmond Birnie, chief economist with PwC in Northern Ireland said prospects in the north appeared less rosey than Britain.
“Overall, the picture of a steady recovery in the UK economy continues and we now expect GDP growth of around 2.4 per cent for all of 2015.
"But this is not being reflected in Northern Ireland, where our forecast for growth in the local economy in 2015 would be less optimistic at 1.7 per cent declining to 1.6 per cent in 2016," he said.
“Today's data from ONS imply that UK GDP is now 6.4 per cent above its previous peak, prior to the banking crisis and recession in 2007-9. In contrast, the most recent data from the Northern Ireland Composite Economic Index suggest that the level of output in Northern Ireland in Quarter 2, 2015 remained 8 per cent below its previous peak level in 2007.
“This is an indication of just how far the local economy is lagging behind the UK recovery and illustrates just how much work needs to be done to close the gap.”
Responding to the figures, Mr Osborne warned that more "tough decisions" would be required to keep the economy on track.
"It is good news that Britain continues to outperform other western economies," he said. "But there are clear global risks and there is still much more to do to fix our economy.
"In the autumn statement we will take more steps to ensure we feel the recovery right across our country, make the long-term investments for the future and, crucially, continue to make the tough decisions required so that Britain lives within its means," he added.
Meanwhile, chief executive of the Federation of Master Builders Brian Berry said the figures "will shake away any complacency that the recovery in the construction industry can be taken for granted".