Resilience without momentum: What our latest survey tells us about Northern Ireland’s economy
As President of NI Chamber, I regularly speak to businesspeople in all sectors across Northern Ireland.
What I hear on the ground is reflected clearly in our latest Quarterly Business Insights report - an economy that is proving resilient in many aspects but one that is struggling to generate the momentum needed for strong, sustainable growth.
Published last week, our research, carried out in partnership with Queen’s University, confirms that even before the recent escalation in the Middle East, businesses in Northern Ireland were operating in a fragile, low-growth environment.
In Q1 2026, growth signals remained weak and uneven. While most key indicators stayed marginally positive, the margins were narrow and showed little sign of strengthening. Put simply, more firms are seeing improvement than deterioration but only just. The overall picture is of an economy that was holding up in the first quarter of the year yet failing to move forward at the pace businesses want or need.
Most firms continue to trade profitably, with around 72% reporting some level of profitability.
However, this is largely driven by moderate rather than strong performance. Only a small minority report high profitability, while nearly half describe results as moderate. At the same time, cost pressures remain firmly embedded.
Confidence remains positive but it has eased slightly. Turnover expectations in both manufacturing and services point to steadiness rather than acceleration and profit expectations are notably more subdued. This gap between turnover and profitability highlights a central challenge facing businesses - growing revenues while managing stubbornly high costs.
Investment intentions tell a similar story. Many firms continue to invest, particularly in training and people, but capital investment is cautious. This reflects a reluctance to commit to large-scale spending in an environment where confidence is fragile and future trading conditions remain very uncertain.
The labour market continues to be one of the most pressing constraints. Recruitment activity strengthened in early 2026, yet this is largely about replacing staff rather than expanding workforces. Recruitment difficulties are extremely elevated, with every manufacturer and more than three quarters of services firms reporting difficulty filling vacancies. Graduate employment also raises concern, with many firms citing skills mismatch and cost pressures as reasons for reducing graduate recruitment over recent years.
On trade, the impact of the Windsor Framework remains uneven. Almost half of firms report an impact, with complexity, clarity around NI and EU rules and administrative burden continuing to present challenges. Among those firms, there is support for reviewing the goods ‘at risk’ test, driven by concerns around cost and proportionality.
With businesses operating in a challenging, low-growth environment, the need for partnership between business and government has never been more evident. There is an immediate need to support firms through ongoing uncertainty, while also addressing long-standing structural barriers to growth.
We stand ready to work in partnership with the UK Government to best understand and support businesses through this challenging period. At the same time, the Northern Ireland Executive must not lose sight of the long-term structural issues firmly within its control. That starts with putting Northern Ireland on a credible path to financial sustainability through a comprehensive review of public spending, whilst also progressing on the long-standing barriers to growth investment including skills, planning, and wastewater capacity constraints.