The Ulster University Economic Policy Centre’s (UUEPC) latest economic Outlook for Northern Ireland, ‘Long-term Pressures, Short-term Decisions’, projects modest job growth of 0.5% in 2026, before strengthening over the longer term. It warns that decisions taken now on productivity growth alongside local policy actions will shape the region’s future growth.
Commenting on the figures, UUEPC Director Gareth Hetherington MBE said the figures reflect ongoing economic pressures:
‘The latest job figures reflect weak business and consumer confidence combined with ongoing geopolitical uncertainty, which Northern Ireland is not immune to. While 2025 began strongly, contractions became evident as the year progressed, with a declining employment rate and rising unemployment. Despite this subdued end to 2025, early indications for 2026 suggest progress, albeit modest, with stronger growth anticipated over the longer term.’
Sectoral forecasts point to strong growth in Construction and Professional Services, alongside Health and Social Work. However, ongoing fiscal constraints facing Northern Ireland are expected to persist, potentially influencing the pace of growth.
Mr Hetherington added:
‘These forecasts can be realised through targeted policy and political action in areas within Northern Ireland’s control. The proposed multi-year budget would provide greater certainty for medium and long-term planning and show the potential for a shift towards locally driven solutions.’
A key factor shaping future growth is Northern Ireland’s long‑standing productivity challenge. While productivity is expected to improve, the latest forecasts have been affected by the Office for Budget Responsibility’s downgraded UK productivity estimates, reflecting broader structural challenges facing the UK economy. These include global protectionism; shifts towards lower‑productivity service sectors; rising demand for health services driven by an ageing population; and a slowdown in the growth of higher‑level qualifications.
Principal Economist Dr Myles Patton said:
‘Unfortunately, this downgrade feeds through to weaker productivity growth in Northern Ireland, reducing expected economic growth with implications for future income, profits and living‑standards. While productivity growth, is anticipated, it will be low and requires policy focus. It is therefore appropriate that the Department for the Economy identify productivity as a key priority.’
The Outlook also highlights economic disparity across Northern Ireland. While there have been improvements in regional balance over the past two decades, there is still significant work to do. UUEPC research shows some local council areas are outperforming the Northern Ireland average, while others lag behind.
Principal Economist, Dr Eoin Magennis commented:
“Regional inequality has been persistent resulting in differences in employment opportunities, productivity performance and earnings across Northern Ireland’s local government districts. These disparities will be acutely felt in local places. Some areas are playing ‘catch‑up’ and addressing this requires collaboration from a variety of stakeholders for a common goal along with ‘place leadership’ that is welcoming to new ideas.”
He added:
“That said, several measures of regional balance point to a general convergence in performance. For example, between 2013 and 2023 every council area experienced an increase in employment rates, including an impressive 9.6 percentage point rise in Derry City & Strabane against a Northern Ireland average of 6.5 percentage points. In addition, productivity improvements are also apparent, with Mid Ulster and Derry City & Strabane delivering compound annual growth rates of 1.4% and 1.3% respectively between 2012 and 2022, compared to 0.7% for Northern Ireland as a whole over the same period. Importantly though, post‑pandemic recovery has stalled in many areas, highlighting the need for innovative policy solutions.”