Growth signals in the Northern Ireland economy remain weak and uneven with demand, investment and hiring all stuck in a cautious range.
A report, published today (Wednesday 28 January 2026) by NI Chamber in partnership with Queen’s University Belfast, shows that while 59% of firms in Northern Ireland expect their own business to grow in 2026, optimism about growth around the wider Northern Ireland economy remains much weaker, with only 23% expecting growth. This latest survey, conducted in Q4 25, illustrates that current business conditions remain resilient but subdued. Demand conditions are soft and at the same time, cost pressures remain elevated.
80% of businesses who responded to this survey report that they are trading well (32%) or reasonably (48%), while 13% say they are just covering costs. 6% report that they are struggling. This points to an environment in which most businesses are coping but where relatively few are thriving and a significant minority remain under pressure.
This picture is reinforced by demand conditions, with 47% of businesses reporting some slowdown in demand in Q4 2025. This is down slightly from 51% in Q3 but still elevated by recent standards. Most of this weakness is described as a small rather than significant slowdown, suggesting a broad-based softening in activity rather than a sharp contraction.
Taken together, this indicates a trading environment characterised more by weak growth, with continued pressure on margins and limited signs of a strong rebound in demand.
Confidence and Investment Intentions
The net balance of firms expecting turnover to grow over the next 12 months is +38% in manufacturing and +51% in services, pointing to solid but not exceptional optimism. Profit expectations are also positive, though more subdued, at +16% in manufacturing and +27% in services.
Investment intentions are positive but cautious. As in previous cycles, training investment remains stronger than capital spending, particularly in services, while manufacturing intentions are more volatile but have been somewhat firmer over the past two years. Overall, investment plans point to gradual, selective spending rather than a broad-based expansion in capacity.
Prices and Costs
Pressure on prices remains elevated across both manufacturing and services, with a relatively large share of businesses in both sectors (59% manufacturing and 44% services) expecting to raise prices over the next three months. Overall, the data points to a persistently high price-rise environment rather than a decisive easing.
This ongoing pressure is being driven primarily by internal cost pressures. Labour costs remain the single largest source of upward pressure on prices in both sectors, impacting 91% of manufacturing and 85% services firms, with no sign of meaningful easing. In manufacturing, input costs worsened in Q4 2025, particularly for raw materials and fuel. In services, utilities and other overhead costs are edging up, reinforcing the sense that cost pressures are broad-based rather than confined to one or two areas.
Alongside these cost pressures, external and policy-related concerns remain prominent. Inflation and business taxation continue to be cited as the most pressing issues facing firms in both manufacturing and services. At the same time, concerns about competition and business rates are edging up, particularly in services, while interest rates and exchange rates remain secondary but persistent concerns. Taken together, this points to an environment in which firms continue to face sustained cost and pricing pressures, limiting scope for margins to recover and keeping inflationary dynamics alive.
Recruitment
While hiring intentions improved modestly in Q4 2025, they remain cautious by historical standards. The net balance of firms expecting employment to grow over the next three months increased to +23% in manufacturing (from +17%) and to +19% in services (from +15%). This indicates that more firms are planning to increase headcount than reduce it.
By contrast, actual recruitment activity has eased more clearly. The proportion of firms trying to recruit fell back this quarter, from 80% to 68% in manufacturing and from 69% to 53% in services. This confirms a broad-based softening in hiring appetite, particularly in services, and suggests that many firms are becoming more cautious about actively expanding their workforce.
At the same time, recruitment difficulties remain elevated for those firms that are hiring. In Q4 2025, 84% of manufacturing firms and 67% of services firms report difficulties in filling vacancies.
Commenting on the survey findings, Suzanne Wylie, Chief Executive, NI Chamber said:
“These findings show an economy that is flatlining, with weak demand (including export orders), rising costs and little sign of momentum in the final quarter of 2025. Businesses are coping, but far too few are growing – and this should be a wake‑up call for the Executive. With just over a year left in this mandate, its legacy will be judged on whether it confronts these pressures or allows them to harden.
“The recently published non-domestic rates revaluation only amplifies the risks: with hospitality at the sharp end at a time when wage, energy and insurance costs are already at breaking point. Unless ministers act quickly on key drivers, they risk overseeing a prolonged period of stagnation and even business failures.”
Richard Ramsey, Professor of Practice at Queen’s Business School added:
“Headline indicators in official data may suggest Northern Ireland is holding up better than some regions in Great Britain, but this can mask the more cautious mood we’re hearing from businesses on the ground. Only 23% of firms expect the Northern Ireland economy to grow in the year ahead, despite far stronger expectations for their own turnover – a clear signal that confidence in the wider economic environment remains subdued.
"Policymakers should be careful not to draw comfort from relative comparisons when UK‑wide growth is already so weak. Northern Ireland isn’t outperforming a strong economy – it’s simply stagnating more slowly than other regions. That distinction matters, particularly as businesses now face a crystallised, structurally higher cost base.”
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