Quarterly Business Insights Q4 2025
NI CHAMBER IN PARTNERSHIP WITH QUEEN'S UNIVERSITYGrowth signals in the Northern Ireland economy remain weak and uneven in Q4 25, with demand, investment and hiring all stuck in a cautious range. There is still no sign of confidence building meaningful momentum across the wider economy. While most indicators remain marginally positive, meaning slightly more firms report improvement than deterioration, the margins are narrow and do not point to a strong or broad-based recovery.
Demand conditions remain soft, with both UK and export order balances hovering around zero and providing little in the way of growth impulse. At the same time, cost pressures remain elevated, with price balances still clearly positive, indicating continued pass-through of costs. Recruitment activity has eased this quarter, driven mainly by a pullback in services, even as recruitment difficulties remain high. Investment and cashflow balances are only marginally positive but unchanged, consistent with a cautious trading environment in which the main constraints continue to be labour, tax, utilities and other overheads, alongside weak demand conditions.
Against a generally weak UK regional backdrop, Northern Ireland continues to perform relatively well, with both manufacturing and services ranking towards the top of the UK across a range of indicators. This outperformance, however, should be seen in context: overall UK conditions remain subdued, and Northern Ireland’s relative strength reflects resilience rather than a strong growth environment. Increasingly, this position is being accompanied by structural labour and skills constraints and more persistent exposure to labour costs and other inflationary pressures.
Taken together, the Q4 25 findings point to an economy that is proving resilient, but remains stuck in a low-growth, high-cost environment.
UK (Domestic) Orders next 3 months (% balance)
Manufacturing
Northern Ireland’s manufacturing sector continues to hold up better than most UK regions but remains firmly in a soft market environment.
UK order expectations have turned negative again this quarter, pointing to renewed weakness in domestic demand, while export expectations remain close to zero, indicating broadly flat external demand. Turnover and profit confidence remain positive but fragile, and price balances are still positive, reflecting continued input cost pressures.
Recruitment demand remains relatively high, but recruitment difficulties continue to be widespread, underlining persistent labour market constraints. Cashflow and activity balances are positive but modest, and while investment intentions also remain positive, they are only at moderate levels. Overall, the main pressures on manufacturers continue to come from input costs, labour costs, tax and other overheads.
Services
Northern Ireland’s services sector continues to lead most UK regions on key indicators, but momentum is clearly easing.
Recruitment activity has fallen again and is now at its lowest level since the COVID period, although recruitment difficulties remain high, underlining ongoing labour market constraints. Price balances remain in positive territory, indicating continued cost pass-through, while cashflow remains positive but has softened slightly. Investment intentions are also still positive, but cautious. Overall, the key pressures on the sector continue to be labour, tax and overhead costs, alongside fragile demand.
Recruitment
While hiring intentions improved modestly in Q4 2025, they remain cautious by historical standards. The net balance of firms expecting employment to grow over the next three months increased to +23% in manufacturing (from +17%) and to +19% in services (from +15%).
This indicates that more firms are planning to increase headcount than reduce it, but the balances remain well below the peaks seen in 2021–22 and are broadly back around pre-COVID norms, pointing to a labour market that is cooling rather than accelerating.
By contrast, actual recruitment activity has eased more clearly. The proportion of firms trying to recruit fell back this quarter, from 80% to 68% in manufacturing and from 69% to 53% in services, the weakest readings since the COVID period. This confirms a broad-based softening in hiring appetite, particularly in services, and suggests that many firms are becoming more cautious about actively expanding their workforce.
At the same time, recruitment difficulties remain elevated for those firms that are hiring. In Q4 2025, 84% of manufacturing firms and 67% of services firms report difficulties in filling vacancies. In manufacturing, recruitment pressures have rebounded during 2025 after easing in 2024 and are now back at very high levels, while in services they remain below the 2022–23 peak but still historically elevated. Overall, this points to a labour market where demand is easing, but supply constraints remain a significant brake on growth.
% Trying to Recruit
Confidence and Investment Intentions
Business confidence has continued to recover from the lows of 2022–23 and is now broadly back to pre-pandemic levels although not pointing to any strong rebound. In Q4 2025, the net balance of firms expecting turnover to grow over the next 12 months stands at +38% in manufacturing and +51% in services, pointing to solid but not exceptional optimism. Profit expectations are also positive, though more subdued, at +16% in manufacturing and +27% in services. While these readings are clearly stronger than during the downturn, they are broadly consistent with pre-pandemic norms, rather than indicative of a strong rebound.
Investment intentions are positive but still cautious. In Q4 2025, balances for training investment are clearly positive in both sectors, while capital investment in plant and machinery is only just positive, indicating a continued reluctance to commit to major spending. As in previous cycles, training investment remains stronger than capital spending, particularly in services, while manufacturing intentions are more volatile but have been somewhat firmer over the past two years. Overall, investment plans point to gradual, selective spending rather than a broad-based expansion in capacity.
Cashflow
Cashflow conditions remain tight across both sectors. In Q4 2025, the net balance of firms reporting an improvement in cashflow is just +1% in manufacturing and +3% in services, pointing to only a very marginal improvement rather than a meaningful recovery. Recent quarters continue to be volatile, with no clear or sustained upward trend.
Over the longer term, cashflow has been weak more often than strong, reflecting the impact of successive shocks and prolonged cost pressures. While the worst of the extremes has eased, current conditions still suggest limited financial headroom rather than a return to comfortable or resilient cashflow positions.
Prices and Costs
This ongoing pressure is being driven primarily by internal cost pressures, above all labour costs, which remain the single largest source of upward pressure on prices in both sectors (91% manufacturing and 85% services), with no sign of meaningful easing. In manufacturing, input costs have worsened this quarter, particularly for raw materials and fuel, while utilities and other overheads also remain widespread. In services, utilities and other overhead costs are edging up, reinforcing the sense that cost pressures are broad-based rather than confined to one or two areas.
Alongside these cost pressures, external and policy-related concerns remain prominent. Inflation and business taxation continue to be cited as the most pressing issues facing firms in both manufacturing and services, even though concern about inflation has eased slightly this quarter. At the same time, worries about competition and business rates are edging up, particularly in services, while interest rates and exchange rates remain secondary but persistent concerns. Taken together, this points to an environment in which firms continue to face sustained cost and pricing pressures, limiting scope for margins to recover and keeping inflationary dynamics alive.
Internal Costs – Pressures on Prices (%)
Regional Position
Northern Ireland continues to rank among the stronger-performing UK regions
Northern Ireland
Northern Ireland continues to rank among the stronger-performing UK regions in Q4 2025 across a wide range of indicators covering demand, exports, employment, investment, cashflow, capacity and business confidence, albeit against the backdrop of a generally subdued UK trading environment.
Manufacturing
In manufacturing, Northern Ireland sits in the top three regions in ten of the eleven indicators, reflecting consistently stronger performance than most regions across sales, orders, exports, employment, investment and capacity, with only confidence in turnover just outside the top three.
Services
In services, performance is stronger still, with Northern Ireland ranking first in the UK on several measures including domestic demand, cashflow, investment and business confidence, and sitting in the top three in ten out of eleven indicators.
Ranked Top Three
Taken together, across manufacturing and services, Northern Ireland ranks in the top three in 20 out of 22 indicators, underlining broad-based relative strength, albeit in the context of a UK economy that remains weak overall.
Business Conditions
Current business conditions remain resilient but subdued, with most firms continuing to trade positively, though relatively few are experiencing strong momentum. Around 80% of businesses report that they are either trading well (32%) or trading reasonably (48%), while 13% say they are just covering costs and 6% report that they are struggling; notably, no firms report being on the verge of closure. This points to an environment in which most businesses are coping but where relatively few are thriving, and a significant minority remain under pressure.
Do you see any signs of slow down currently in demand for your products and/or services?
2026 Business & Economy Prospects
% Expecting Growth in the Next Year
Business expectations for 2026 point to a cautious and uneven improvement in sentiment rather than a full recovery.
This persistent gap between confidence in individual firms and in the wider economy reflects a strong sense that the policy environment, rather than business capability, is the main constraint on growth. In response, businesses are calling for government in 2026 to focus on delivery, stability and practical action to reduce the cost of doing business.
Priorities include avoiding further increases in the cost of employing people, accelerating action on infrastructure and planning, improving the effectiveness of government and public services, and providing a more stable, pro-growth policy environment with fewer surprises and clearer long-term direction. Together, this points to a strong desire not just for growth-friendly policies, but for consistent execution and a more supportive operating environment.
Autumn Budget
Businesses view the Autumn Budget as anti-growth and damaging to confidence, with widespread concern that it relies on stealth taxes while offering no credible plan for economic growth.
Firms are particularly opposed to tax rises that increase the cost of employing people or doing business, drawing a clear line against increases in corporation tax, income tax and VAT, while showing greater tolerance for more targeted measures such as environmental levies or taxes on luxury goods. Notably, around half of businesses would prefer no tax rises at all.
Salary Sacrifice Scheme Usage
More companies already use salary sacrifice in some form (51%) than those who have no plans to introduce one (31%), suggesting it is relatively mainstream but far from universal.
Among those that do use it, twice as many offers salary sacrifice for multiple benefits (34%) as restrict it to just one or two (17%), suggesting more mature schemes tend to be broader rather than limited.
Use of salary sacrifice rises sharply with company size, with large (87%) and medium (67%) firms far more likely to offer schemes, especially across multiple benefits, than micro (21%) and small businesses (55%). Sectorally, 57% of Manufacturers, 54% of Professional Services and 48% of ‘Other Sectors’ have a salary sacrifice scheme in place.
Does your business currently use salary sacrifice schemes as part of an employee benefit scheme?
The QUB Perspective
Policymakers should be careful not to draw comfort from relative comparisons when UK‑wide growth is already so weak. Northern Ireland isn’t outperforming a strong economy – it’s simply stagnating more slowly than other regions. That distinction matters, particularly as businesses now face a crystallised, structurally higher cost base.”
Richard Ramsey, Professor of Practice, Queen’s University
The NI Chamber Perspective
“These findings show an economy that is flatlining, with weak demand (including export orders), rising costs and little sign of momentum in the final quarter of 2025. Businesses are coping, but far too few are growing – and this should be a wake‑up call for the Executive. With just over a year left in this mandate, its legacy will be judged on whether it confronts these pressures or allows them to harden.
“The recently published non-domestic rates revaluation only amplifies the risks: with hospitality at the sharp end at a time when wage, energy and insurance costs are already at breaking point. Unless ministers act quickly on key drivers, they risk overseeing a prolonged period of stagnation and even business failures.”
Suzanne Wylie, Chief Executive, NI Chamber
A total of 229 businesses responded to the NI Chamber of Commerce & Industry Quarterly Economic Survey, in partnership with Queen’s University Belfast, for Q4 2025, representing over 35,000 employees in Northern Ireland.
Fieldwork was conducted between xxxxxxxx
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