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UK GDP growth slips - "UK economy reverting firmly to type" - reaction from economist at the global job site Indeed

Mariano Mamertino, economist at the global job site, Indeed, comments:

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Indeed

“In the face of global economic headwinds, Brexit uncertainty and the increased labour costs introduced by the National Living Wage, the UK economy is reverting firmly to type - and a worryingly heavy reliance on services.

“While the economy’s overall rate of growth is still respectable, the momentum is coming entirely from the service sector. With manufacturing and construction output both declining in the first quarter of 2016, warning lights are glowing brightly on the country’s economic dashboard.

“This could prove a critical juncture for the economy. A series of nagging economic problems could ensure that growth in the second quarter will be weaker still.

“The combination of the increased labour costs of the National Living Wage and the growth-sapping uncertainty triggered by the EU referendum have led labour costs to rise - and stalled employers’ appetites to hire new staff.

“This weakening labour market is revealed clearly in the latest Indeed Industry Employment Trends Index. In March, it recorded that job postings by UK employers were down across all 13 major sectors measured.

“With businesses battening down the hatches ahead of the Brexit referendum - and adjusting to the National Living Wage - this does not bode well for the second quarter.

“The weakness of manufacturing is particularly acute, with Indeed’s data confirming that job postings for the sector are down a third relative to a year ago, weaker than any other sector of the UK economy.

“In March alone, the number of manufacturing jobs posted was 10% lower than in February."