Despite the uncertainty, if Executive gets it right we can move to prosperity
Thursday's decision was a shock - to sterling, the markets and the economic system. And, as we start a new week, not much has changed. The pound resumed its historic slide, down 14% since Thursday, hitting a fresh 30-year low as traders shrugged off the Chancellor's attempts to calm the financial markets.
History teaches us that uncertainty tends to depress investment and growth, at least for the short term, and any lack of a clear post-Brexit vision, combined with leadership challenges in both Labour and Conservatives, is fuelling the post-referendum fires.
Nevertheless, it is important to put such immediate effects into perspective.
First of all, there are some things which stay, more or less, the same for Northern Ireland.
There is a long list of economic and social problems confronting Northern Ireland, and Thursday's vote has not altered them in the slightest. The Executive - and the rest of us - continue to face issues like a low level of productivity, underperformance in many parts of the education and training system, an unreformed health care system and the continuing challenge of balancing the Executive's books.
The economic recovery in Northern Ireland has probably been slowing since early to mid-2015, well before the Referendum, and Brexit can't be blamed for most of that slowdown. There is no need for the outcome to tip the economy into outright recession unless businesses and individuals believe that is what will happen.
Today, at a formal level, things remain as they were on June 23 in terms of the legal relationship between the UK and rest of the EU. Even when separation is fully negotiated - whenever that happens - initially most things will remain "as is", only gradually are the legal, regulative and business conditions likely to diverge.
Some uncertainty continues. For example, the timescale of exit. Article 50 of the Lisbon Treaty describes a negotiating period of no longer than two years once notice to leave has been given (that two-year period could be extended by agreement, but that would require the consent of all the 27 other EU members). So, and this is an especially interesting question given that the composition of the UK government is about to change, how quickly will the UK government move to give that notice to leave?
There are some things which may change for Northern Ireland.
The Common Travel Area with the Republic of Ireland: this dates back to the 1921 Treaty, which established Irish independence and partition. Many politicians from both governments and both Brexit and Remain camps want to see it continue. However, there could be unintended consequences.
Customs requirements on the Irish border: much depends on the extent to which the UK negotiates continued access to the Single Market. Even if it didn't, the optimistic view is that many of the formalities could be pre-cleared using technology, so will trucks have to stop at Newry?
Replacement of EU funds: the Executive will obviously be hoping that the UK government will keep in place levels of support similar to those enjoyed through EU Single Farm Payments, Structural and Peace funds. None of this is certain. Even if the agricultural community can create a New Zealand-style free market, the transition will be both costly and probably painful. At the very least, there will be some administrative cost involved in setting up new systems of disbursing support.
Barnett Formula: with the UK out of Europe, the Treasury might decide this is the time to re-examine the totality and methodology of funding between the UK Exchequer and the three Devolved Administrations. If they start with a blank sheet of paper, the Barnett Formula is unlikely to survive.
Corporation tax cut 2018?: it is unclear how far the UK will still have access to the Single Market, so that might impact on Northern Ireland's attractiveness as a location for inward investment.
An optimistic view might be that Brexit means we are beyond the remit of the European Court of Justice (ECJ), but does it also follow that there is no longer any need (given the Azores Judgement could cease to apply) for a reduction in Northern Ireland's block grant from Treasury?
However, if Westminster decides to review the overall relationship between the UK Exchequer and the devolved nations, would that really mean ever more generosity towards Northern Ireland?
Then there's Scotland and the possibility of what's been dubbed IndyRef2. If the Scots gain - and win - a second independence referendum, relationships between Westminster and the rest of the country are certain to be redefined, which takes us back to the survival of the Barnett Formula.
What does all this mean for the Programme for Government (PfG)? In theory, things could go on as previously scheduled - working towards completing the PfG by the end of 2016. In practice, the uncertainty around the UK's relationship with the EU and any consequent redefinition of Northern Ireland's position relative to the UK central government and Exchequer may now become all-consuming. The Executive could then find it difficult to create the space within which to translate an "outcome orientated" PfG into an achievable reality.
And forget about re-running the referendum - the UK has voted and now we need to get over it and reinvent our future.
If the Executive can get the policy response right, Northern Ireland already has a number of world class competitive firms and business clusters, so opportunities exist and more will emerge.
In the long run, there should be enough resilience to pass through the short-run shock and move on to prosperity.
In next week's Economy Watch, we hear from Andrew Webb of Webb Consulting