Business activity and new orders decline sharply for Northern Ireland businesses, yet hiring continues and sentiment improves, Ulster Bank reports
Ulster Bank tracker shows continued slowdown in private sector activity, but firms remain resilient with rising employment and renewed optimism for the year ahead
Northern Irish businesses faced a challenging end to the third quarter of 2025, according to new research.
The latest Ulster Bank Regional Growth Tracker signalled ongoing challenges in the Northern Ireland private sector in September, with output and new orders softening as Q3 came to a close.
Despite such pressure, employment continued to rise and companies were optimistic regarding the year-ahead outlook.
The headline Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s private sector – posted 44.9 in September, down from 47.3 in August. Business activity has continued to soften throughout the last quarter, with the latest moderation often linked to lower new orders.
Activity decreased in three of the four broad sectors, the exception being construction where output ticked higher.
Sebastian Burnside, chief economist for Ulster Bank, said: "Companies in Northern Ireland faced a challenging end to the third quarter of the year as they found it increasingly difficult to secure new orders and therefore scaled back business activity to a greater extent.
"Nonetheless firms are still optimistic that better times lie ahead, and actually saw an improvement in business sentiment in September. This optimistic assessment of the future and associated planning is a key reason why firms continue to hire additional staff despite the falls in current workloads.
"There was some respite on the inflation front, with the pace of increase in costs slowing and coming in below the UK average. With output prices also rising at a weaker pace, firms may start to see an improvement in customer demand as we head towards the end of the year.”
As has now been the case on a monthly basis for almost a year, new orders fell in the Northern Ireland private sector during September. The solid reduction was the sharpest since April. Economic uncertainty, contract delays and muted demand were among the factors leading new business to fall, according to panellists.
Projected increases in new orders in the months ahead supported optimism among Northern Ireland companies that business activity will be higher than current levels in a year's time. Sentiment ticked up to the highest since May and was in line with the series average.
Despite reductions in business activity and new orders, Northern Ireland companies continued to increase their staffing levels in September.
Panellists linked rising employment to a range of factors including the filling of long-standing vacancies, the replacement of leavers, efforts to support future growth and the need to ensure sufficient capacity.