Northern Ireland's economic output expanded by 2.3% in the year to June, outpacing growth across the wider United Kingdom and demonstrating resilience in the regional economy. However, business leaders are warning that mounting energy and fuel costs threaten to undermine this progress in the months ahead.
Official figures released on 24 September 2026 show that economic activity in Northern Ireland during the second quarter of the year accelerated faster than comparable periods in both the UK and the Republic of Ireland. The region's composite economic index, which serves as the equivalent measure to UK GDP, reached a new series high, with quarterly expansion of 1.0% alongside the annual growth rate of 2.3%.
By contrast, UK GDP increased by only 0.4% over the same quarter and 1.2% over the year, according to official Economy Department figures. The Republic of Ireland recorded GDP growth of 10.2% over the latest quarter, though its "Modified Domestic Demand" measure—which strips out distorting effects of globalisation—fell by 0.8% during the same period.
According to the latest NISRA release, private sector output rose 1.0% quarterly and 2.2% annually, while public sector output increased 0.9% quarterly and 2.5% annually. The Northern Ireland economy now stands 12.7% above its pre-pandemic level, marking a significant recovery milestone.
What drove the growth?
Production output, encompassing manufacturing, electricity, gas, water, waste, and mining sectors, provided the primary impetus for expansion. This category surged 2.9% over the quarter and 7.8% over the year, reflecting strong international demand and successful export performance. The services sector, which represents the largest component of the Northern Ireland economy, also expanded during the 12-month period.
Greg Bradley, founder of BLK BOX, a Newtownabbey-based manufacturer of gym equipment, exemplifies the export-driven growth. His company has secured contracts with prominent global customers ranging from sports teams like Manchester United to fitness chains including PureGym, and has expanded its workforce to 180 staff members.
Bradley attributed part of the company's international success to changing consumer behaviour following the pandemic.
"Covid had made people realise the importance of their health and a lot of young people are into going to the gym,"he said. The company now operates across multiple continents, including France, Spain, Germany, the United States, Sri Lanka, the Maldives, India, and Australia.
He highlighted the Windsor Framework as a competitive advantage compared to English rivals.
"We've been able to win a contract with a large French gym chain, Stade Français rugby team, so it's actually worked out good for us and we are really doubling down on that. There's still a bit of an education process with it, not everyone knows that we can ship frictionlessly across Europe, they are a bit scared of tariffs but once you explain it, everyone is really interested."
Reflecting on his entrepreneurial journey, Bradley recalled early scepticism about international expansion.
"When I started the business 14 years ago I remember someone telling me I would never sell outside of the island of Ireland and I remember thinking, 'I'm going to prove you wrong'. Thankfully, we have been able to do that."
How are rising costs affecting businesses?
Despite the positive headline figures, business operators across Northern Ireland face mounting pressure from escalating energy and food costs that could significantly constrain economic activity in coming months. Daniel Duckett, a pastry chef who closed his east Belfast patisserie last year before reopening in partnership with Knott's bakery chain at Forestside shopping centre, has firsthand experience of these pressures.
Duckett explained that the partnership provides crucial advantages in managing input costs.
"They have the buying power for ingredients so they can control costs a little bit better than we would have been able to. They have been able to absorb a lot more of the costs that we would have been paying before,"he said.
Rising petrol prices present a particular concern for food producers and distributors.
"We have to think, how much do we deliver to the shops? Because that will also affect our petrol prices that fill up vans that travel across Northern Ireland,"Duckett explained. In April 2026, petrol prices in Northern Ireland had risen from 124.8p per litre to 153.1p, while diesel climbed from 132.6p to 185.6p, according to Consumer Council data. Some analysts described these increases as disproportionately severe in the region, with petrol up 19% and diesel up 35% since late February.
Duckett also flagged climate-related risks affecting ingredient sourcing.
"I think a lot of people don't realise that the weather and global warming affect a lot of the products we bring in - tropical fruits, vanilla, cocoa, sugar cane. Those are things that are definitely affected by storms and El Niño. I would try to brace myself for that as well,"he said.
According to Ulster Bank's regional tracker, business input cost inflation accelerated to its fastest pace since October 2022 in April 2026, with more than 69% of respondents reporting that input costs had risen.
What challenges lie ahead?
Duckett warned that businesses must remain vigilant about cost management in the second half of the year.
"For the second half of the year we will have to be vigilant about where those products that have to travel far come from, as petrol prices will have to factor in to that,"he said.
The Economy Minister previously called for an immediate reduction in fuel duty in April 2026, citing the severe pressure that rising fuel costs were placing on households and businesses across Northern Ireland. The combination of elevated energy prices, volatile commodity markets, and climate-related supply chain disruptions creates a complex operating environment for regional businesses despite the underlying strength shown in recent economic data.
What happens next?
The next quarterly update on Northern Ireland's economic output will provide crucial insight into whether the 1.0% quarterly growth rate demonstrated in the period to June 2026 can be sustained. Economists and policymakers will be watching closely to determine whether the positive momentum can overcome the headwinds created by persistent cost pressures affecting both households and businesses across the region.
