NI economy 'to outperform the UK average over five years'

Northern Ireland's economy will outperform the UK average over the next five years, a new forecast by Ulster University economists suggests.

The university's Economic Policy Centre (EPC) has upgraded Northern Ireland's growth prospects in light of a resilient jobs market.

It now expects the NI economy to grow by 1.6% this year, compared to a 1.3% forecast made at the end of last year.

By contrast it has downgraded its UK 2026 forecast from 1.4% to 1%.

The centre expects Northern Ireland to grow slightly above the UK average up to the end of the forecast period in 2030.

Economic forecasting is highly uncertain at the moment, as the conflict in the Persian Gulf can quickly move energy prices which in turn can dramatically shift expectations for inflation and interest rates.

The EPC forecast was completed before the most recent flare up in that conflict which has seen energy prices rise sharply over the last week.

The centre takes a relatively optimistic view of Northern Ireland's prospects because of the resilience of the jobs market.

It 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.

"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 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.

Meanwhile new official figures published on Tuesday suggest the jobs market in Northern Ireland was flat in June.

There was no monthly growth in HMRC payrolls and no statistically significant changes in employment, unemployment, or economic inactivity over either the quarterly or annual periods.