NI Economy Growth Slows at End of 2025
The Northern Ireland economy continued to grow through the end of last year but exhibited signs of slowing momentum, according to official data. This development occurs amid increasing concerns about the economic repercussions of the ongoing US-Israeli conflict involving Iran.
On Thursday, the Organisation of Economic Co-operation and Development (OECD), a prominent global policy organization, revised its forecast for UK economic growth in 2026, lowering it to 0.7% from an earlier projection of 1.2%. The OECD highlighted that the UK is expected to experience the most significant growth slowdown among major economies.
Data specific to Northern Ireland indicates that the local economy expanded by 1.6% over the entirety of 2025. This growth was primarily driven by a robust performance in the second quarter, with a notable deceleration beginning in the summer months. Between the third and fourth quarters, growth was minimal, registering at just 0.2%.
The services sector, which has been the primary driver of growth since the pandemic, experienced a decline in output during the fourth quarter. The Northern Ireland economy is assessed using the Northern Ireland Composite Economic Index (NICEI), a metric comparable to Gross Domestic Product (GDP).
Stormont's Economy Minister, Caoimhe Archibald, responded to the figures by emphasizing the resilience demonstrated by local businesses and workers amid an "increasingly uncertain economic situation" stemming from the conflict in the Middle East.
Economic Performance Revisions and Analysis
Richard Ramsey, an economist at Queen's University Business School, commented on the data revisions, indicating that the performance of Northern Ireland's economy in 2025 was not as strong as previously believed.
"The biggest takeaway concerns the revisions to previous data," Ramsey said.
"Over the last six months, economists and business leaders were surprised at the scale of Northern Ireland's apparent economic outperformance.
"The latest NICEI figures confirm that the scale of NI's economic growth outperformance isn't as large as previously stated.
"It is now revealed that private sector output contracted in the third quarter of 2025 by 0.7% as opposed to expanding by +1.2%. Private sector services contracted in the last two successive quarters in 2025."
Despite these revisions, more recent jobs market data suggests that the Northern Ireland economy continued to generate employment in recent months. HM Revenue and Customs (HMRC) figures estimate that nearly 821,000 individuals were on company payrolls in February 2026, an increase of approximately 4,000 since December 2025.
