Ulster University's Economic Policy Centre now expects the Northern Ireland economy to grow by 1.6% this year, up from a 1.3% forecast made at the end of last year. The university's Economic Policy Centre (EPC) says Northern Ireland will outperform the UK average over the next five years, although it has downgraded its UK 2026 forecast from 1.4% to 1%.
Northern Ireland's economy is expected to grow slightly above the UK average up to the end of the forecast period in 2030. The EPC says its outlook reflects a resilient jobs market, even as economic forecasting remains highly uncertain because of the conflict in the Persian Gulf and recent energy price rises.
How has the jobs market shaped the outlook?
The EPC takes a relatively optimistic view of Northern Ireland's prospects because of the resilience of the jobs market. The centre points to the official workforce jobs measure, which in Northern Ireland increased at the fastest annual rate of any UK region between the first quarter of 2025 and first quarter of 2026.
Employment actually fell in nine of the 12 UK regions over this period. EPC Assistant Economist Todd Gowdy said strong employment growth has been a key driver of economic performance over the past year.
"Strong employment growth has been a key driver of economic performance over the past year and our forecasts indicate that this momentum will continue, with workforce jobs expected to exceed one million by 2032," said EPC Assistant Economist Todd Gowdy.
The EPC forecast was completed before the most recent flare up in the conflict in the Persian Gulf, which has seen energy prices rise sharply over the last week. The centre says economic forecasting is highly uncertain at the moment, as energy prices can quickly move and dramatically shift expectations for inflation and interest rates.
How this will affect Northern Ireland's economy is not yet clear, but the EPC has already adjusted its view of the UK economy downward for 2026 while lifting its own growth estimate for Northern Ireland.
What is behind the economic growth forecast?
The reason for Northern Ireland's relatively good jobs performance over the last year is uncertain. Some economists have suggested the relatively large public sector in Northern Ireland acts as a shock absorber, with the public sector slower to cut jobs than the private sector.
Others point to potentially positive spillovers from the strongly performing economy in the Republic of Ireland. Unlike the rest of the UK, Northern Ireland has remained part of the EU's single market for goods after Brexit, however that has not led to major job creation in manufacturing.
The EPC forecasts that manufacturing will add 4,000 jobs over 2025-2035, lower than the 11,000 added between 2015–2025.
The centre says strong employment growth has been central to recent economic performance, but it does not attribute the improvement to a single cause. It says the outlook remains dependent on how current energy market pressures and broader economic conditions evolve.
How has the Iran war hit the NI economy?
Heating oil customers to get compensation after price hikes
NI economy slowed ahead of Iran crisis
Key Facts
- Ulster University's Economic Policy Centre now expects NI economy growth of 1.6% in 2026.
- The previous NI forecast at the end of last year was 1.3%.
- The EPC has cut its UK 2026 forecast from 1.4% to 1%.
- Northern Ireland's workforce jobs rose at the fastest annual rate of any UK region between Q1 2025 and Q1 2026.
- The EPC says workforce jobs are expected to exceed one million by 2032.
