'Struggled to gain momentum': Northern Ireland private sector output falls once again
The downturn was attributed to reduced customer spending and a 10th consecutive monthly fall in new orders, in stark contrast to a return to growth across the UK overall
Business activity in Northern Ireland’s private sector saw a notable decline in August, according to the latest Ulster Bank Regional Growth Tracker.
The Business Activity Index dropped to 47.3, down from 49.7 in July – its lowest level in four months – signalling a solid contraction in output.
The downturn was attributed to reduced customer spending and a 10th consecutive monthly fall in new orders, in stark contrast to a return to growth across the UK overall. Manufacturing was hit hardest, posting its sharpest drop in output since December 2022, while construction was the only sector to register growth.
Despite weaker demand, employment continued to rise, marking the third month of job gains.
Northern Ireland was the only UK region among the 12 monitored to see a rise in staffing levels. Firms cited efforts to boost capacity and recruit skilled workers as reasons for the uptick.
Inflationary pressures showed signs of easing, with input cost inflation at its lowest so far in 2025, although still above the long-term average. Wage growth remained a key driver of cost increases. Companies also noted ongoing delays in supply chains, partly linked to Brexit-related issues.
Business confidence weakened, hitting a four-month low amid concerns over muted demand and limited public sector funding. However, some firms remained optimistic, anticipating a rebound in orders over the next year.
Sebastian Burnside, chief economist for Ulster Bank, said: “Northern Ireland's private sector struggled to gain momentum in August, as customer caution led to reductions in new orders and business activity. The picture in Northern Ireland was gloomier than across the UK as a whole, where new orders returned to growth.
“Employment remained a bright spot as firms continued to take on extra staff, looking to rebuild capacity and secure a greater range of skills after having faced struggles recruiting staff in previous years.
“Inflationary pressures showed signs of softening. Input costs increased at the slowest pace in 2025 so far, providing some respite for firms. Where costs did rise, wages were again a key feature of company reports.”