Quarterly Business Insights Q3 2025
NI CHAMBER IN PARTNERSHIP WITH QUEEN'S UNIVERSITYThe findings from Q3 2025 reveal a resilient but stretched business environment in Northern Ireland. Firms continue to face sustained cost pressures, particularly from wages and taxation. While overall sentiment remains cautiously positive, confidence has moderated since early 2025. Many businesses are maintaining operations and employment despite tightening margins and weaker cashflow.
Across both the Manufacturing and Services sectors, a balance of firms still expect turnover and profitability to rise over the next 12 months, suggesting cautious optimism. However, confidence in profitability remains notably below turnover expectations, reflecting the reality of persistent cost and margin pressures.
Although demand growth has slowed, Northern Ireland continues to outperform the UK average across most major indicators, with manufacturing maintaining a particularly strong position. Northern Ireland also stands out nationally for export performance, recording positive export order balances in both sectors when nine of the twelve UK regions are in negative territory.
Manufacturing continues to anchor growth, supported by firm domestic demand and stable investment, while services are showing softer momentum as cost and tax pressures weigh more heavily on margins.
Recruitment challenges remain widespread. Many firms are operating on fine margins. At the same time, businesses are calling for a renewed focus on competitiveness through structural reform and a more stable fiscal environment.
% balance of firms confident that profits will grow in the next 12 months
Manufacturing
Northern Ireland’s manufacturing sector continues to outperform most UK regions, underpinned by stronger order books and stable investment intentions.
A balance of +53% of manufacturers expect turnover to grow over the next 12 months. Domestic demand is at its strongest in more than a year, while export growth remains subdued at +5%, reflecting ongoing global and trade headwinds.
Recruitment demand remains high, with +80% of firms attempting to hire, but skill shortages, particularly in technical and management roles, remain a key constraint.
Investment plans are steady rather than expansionary, suggesting that businesses are maintaining capacity amid persistent cost pressures. Confidence in profitability is positive but restrained, reflecting ongoing margin compression from labour and input costs.
Overall, manufacturing remains a pillar of Northern Ireland’s private-sector resilience, ranking among the UK’s strongest regions across employment, investment, and confidence metrics.
Services
The services sector continues to perform well but shows more variation than manufacturing this quarter.
Some +69% of service firms are attempting to recruit, although hiring momentum has levelled off. Wage inflation, taxation, and utilities costs are squeezing margins, leading to reduced investment appetite.
Despite these challenges, the services sector continues to outperform most UK regions, ranking around 5th nationally on average and sitting above the UK balance in eight of eleven key metrics. While profitability is under strain, services firms continue to display adaptability and resilience.
Recruitment
Employment expectations remain positive, though slightly softer than in early 2025. A balance of +17% in manufacturing and +15% in services expect to increase headcount over the next quarter.
Recruitment activity remains robust, with +80 of manufacturers and +69% of services firms attempting to recruit during Q3 2025.
Recruitment difficulties persist at high levels with +84% of manufacturers and +75% of services reporting challenges finding suitable candidates. Difficulties have eased marginally for services but remain elevated for professional/managerial skills where recruitment challenges are highest across the UK regions by a significant margin (West Midlands next at +58%). In manufacturing, shortages of technical and managerial skills remain particularly acute.
% Facing Recruitment Difficulties
Confidence and Investment Intentions
Business confidence remains positive but below pre-pandemic highs. Manufacturers show stronger turnover expectations (+53%) than services (+28%). Profitability confidence is also positive, though tight margins continue to weigh on sentiment.
Investment intentions remain stable. They are positive for manufacturing and marginally negative for services, signaling that firms are maintaining activity rather than expanding. Training investment is holding firm, especially in manufacturing, as firms prioritise upskilling to address ongoing skill shortages.
Cashflow
Cashflow balances for both manufacturing (-2%) and services (-5%) remain weak and negative in Q3 2025. Despite some modest quarter-to-quarter fluctuations, neither sector has managed to sustain a positive balance since 2022. This persistent weakness highlights the ongoing pressure on operating margins and the limited financial headroom available to many firms.
Prices and Costs
Price expectations have eased slightly across both sectors but remain above pre-pandemic levels. Labour costs (+89% manufacturing, +87% services) continue to dominate internal pressures, followed by raw materials and utilities. For both sectors, Northern Ireland ranks first across the UK regions in terms of the share of businesses citing labour costs as a key challenge.
Inflation (+66% manufacturing, +62% services) and business taxation (+51% manufacturing, +64% services) remain the top external concerns cited. Lower expectations to raise prices is more likely to reflect weaker demand and limited capacity to absorb further costs rather than genuine relief from inflation.
% balance expecting to raise prices over the next 3 months
Regional Position
Northern Ireland continues to outperform the UK average across most indicators.
Manufacturing
Ranks 1st or 2nd in six of eleven indicators, sits in the top three in eight, and exceeds the UK balance in ten. Average ranking: 3rd nationally.
Services
Ranks around 5th on average, above the UK balance in eight of eleven indicators.
Combined
Northern Ireland outperforms the UK balance in 18 of 22 key metrics, demonstrating broad-based strength and resilience.
Business Conditions
Business conditions in Northern Ireland have softened in Q3 2025, with more firms reporting increasing strain. Just over half (51%) of businesses say activity or demand has weakened compared with three months ago, while nearly a quarter (24%) are now under clear financial pressure, the highest proportion since early 2023.
Rising wages, tax, and input costs continue to squeeze margins, leaving limited capacity to absorb further increases or invest for growth. After signs of easing earlier in the year, the number of firms reporting weaker demand and tighter finances has ticked upward again, signalling a more cautious mood.
Do you see any signs of slow down currently in demand for your products and/or services?
Hard-to-Fill Vacancies
24%
22%
Hard-to-fill vacancies and leadership roles remain a challenge for 78% of businesses, particularly for high-skill and leadership roles:
Firms also report shortages in sales, finance, digital, and operational areas, showing that skill gaps affect both strategic and day-to-day functions.
Recruitment difficulties are driven by a lack of experienced applicants (61%), technical skill gaps (55%), and competition on pay and benefits (54%). Other cited factors include mismatched skill profiles (36%), hybrid-working expectations (30%), public-sector competition (21%), and limited soft skills (20%). In addition, 13% are affected by Visa/immigration constraints.
These findings highlight a structural mismatch between workforce capabilities and business needs, an issue constraining productivity and growth across the Northern Ireland economy.
% Aware of MaSN Cap
The MaSN Cap and Graduate Recruitment
Awareness of the Maximum Student Numbers (MaSN) cap remains low with only around one in three firms (36%) familiar with it.
Awareness is highest among large businesses with 250+ employees (58%) but much lower among micro and SME firms (around 30%). Awareness is highest in public and professional services but remains low across most other sectors, including manufacturing and construction.
Among those who are aware of the MaSN cap, almost 1 in 3 state that the cap doesn’t impact on their business and a further 18% state the impact is limited as they are reducing graduate intake. Around two-fifths (38%) are taking action with 21% expanding apprenticeships or training and 15% relocating roles outside Northern Ireland.
Support for a renewed conversation on the devolution and lowering of corporation tax
Corporation Tax
A large majority (82%) of businesses support renewed discussions on devolving and lowering Corporation Tax in Northern Ireland, with 62% strongly agreeing. Many see this as a vital lever to boost competitiveness and attract investment, with some referencing it in addition to Northern Ireland’s dual market access to the UK and EU.
However, firms stress that reform should be part of a broader competitiveness strategy including investment in skills, R&D, and infrastructure to ensure long-term benefits. Fiscal constraints and political uncertainty are recognised as key barriers to progress.
The QUB Perspective
“These findings underscore both the challenge and opportunity facing Northern Ireland’s economy. With businesses showing resilience, manufacturers expecting strong growth and our region outperforming on exports, there’s clear demand for the skilled graduates we produce.
“A triple helix approach based on partnership between government, industries and Further and Higher Education providers, which prioritises skills, R&D, and infrastructure investment, is the key starting point for sustained and sustainable inclusive economic growth in Northern Ireland. We need government, industry, and universities working together, aligning policy frameworks like the MaSN cap with economic need, deepening industry academic collaboration, and ensuring our talent pipeline matches the ambitions of businesses that are investing in training despite tight margins.
“This is our opportunity to demonstrate that strategic investment in higher education isn’t separate from economic recovery, it’s fundamental to it.”
Professor Sir Ian Greer, President and Vice-Chancellor, Queen’s University Belfast
The NI Chamber Perspective
“Ahead of the Autumn Budget, the high cost of doing business continues to create a cautious yet resilient business environment. And whilst in relative terms, it is encouraging to report that Northern Ireland has recently been outperforming the UK average across many indicators, business conditions have weakened somewhat this quarter, with ongoing pressure on operating margins and limited financial headroom available to many firms.
“Members are eager to see government follow through on commitments which will help boost growth and Northern Ireland’s competitive proposition. This is evidenced by the overwhelming majority who support the restarting of the conversation on corporation tax between the Executive and UK government. There is a clear desire to reduce costs, and create a new growth story underpinned by an ambitious long-term economic strategy.”
The QES survey measures key ‘balances’ across indicators such as local sales, exports, employment, and confidence. The balance equals the percentage reporting an increase minus those reporting a decrease.
A total of 169 businesses responded to the NI Chamber of Commerce & Industry Quarterly Economic Survey, in partnership with Queen’s University Belfast, for Q3 2025, representing over 50,000 employees in Northern Ireland.
Fieldwork was conducted between 27 August and 15 September 2025.
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Helping businesses grow locally and internationally