NI Chamber has urged policy makers in Stormont and Westminster to be ‘courageous’ in supporting businesses through the challenging weeks and months ahead. Calling on the UK government to stand up a team of experts to support businesses dealing with the implications of US tariffs, Suzanne Wylie stressed the need for ‘calm heads and careful, constructive assessment.’
That plea came as NI Chamber and BDO NI published the results of their Quarterly Economic Survey (QES) for Q1 25. The report illustrates that while businesses continue to grapple with high labour costs, inflation and taxes, there were signs of optimism during the first quarter of the year. Northern Ireland’s export performance was strong in Q1, with both Manufacturing and Services businesses surpassing the UK average.
Business conditions
Most businesses who responded to this survey traded either well (31%) or reasonably (49%) in Q1 25, while 20% said they were just covering costs/struggling. Almost half of them (46%) experienced a slowdown in demand in Q1 25, although for most, this was only a small slowdown.
Employment growth expectations improved across both sectors, signalling positive momentum at the onset of the new year. Recruitment challenges showed signs of easing.
Cashflow balances for both the Manufacturing and Services sectors were negative in Q1 2025 at –3 and -1 respectively. Notably, the Services sector has now experienced four consecutive quarters of negative cashflow balance.
While price pressures eased in Q1, they remained a concern, particularly for Manufacturing businesses. These pressures were largely driven by rising labour costs along with raw material costs for Manufacturers, with inflation and business taxes continuing to pose external challenges.
In Q1 25 a balance of 55% of Manufacturers was expecting to raise prices, compared to 38% of Services. This was +49% for Services in Q4 24, so it was down considerably over the quarter.
Regional position
In Manufacturing, Northern Ireland ranked in the top three UK regions for eight of the 11 key indicators during Q1 25. The sector’s strongest rankings were around confidence in turnover growth and investment in training, both ranking first across the UK regions. It was weakest on the domestic (UK) sales and orders balance, ranking seventh.
In Services, Northern Ireland ranked in the top three UK regions for nine of the 11 key indicators. The Services sector’s strongest regional position in Q1 ’25 was export sales. It ranked first across the UK regions on six balances, including domestic sales and orders, export performance, employment growth and confidence in turnover growth. The Services balance was weakest with cashflow, ranking fifth across the UK regions.
Commenting on the report, Suzanne Wylie, Chief Executive, NI Chamber said:
“These results correlate strongly with the most recent NI Composite Index, which indicated that Northern Ireland saw economic growth in 2024. And whilst it is encouraging to report a relatively positive performance during Q1, is an illustration of how quickly the trading environment can change, the past week has delivered big changes which present a real and substantial test for NI businesses. The Q1 results were positive in many respects – what matters now is how we build on that momentum in the immediate term.
“Whilst it remains a complex picture, we know that US tariffs will have ramifications for businesses in Northern Ireland. In response, our politicians must be both courageous and strategic, working in partnership with businesses to help navigate the uncertainty ahead.
“This is a time for calm heads and careful, constructive assessment. In anticipation of an escalation of US tariffs, NI Chamber has been actively engaging with policymakers in Westminster, Brussels, Stormont and Dublin since January. In all of that, our aim has, and will continue to be to ensure that Northern Ireland and its unique circumstances are adequately considered as both the UK and EU prepare to respond. Given the complexities involved, we have called on the UK government to stand up a team of experts to support our businesses through this challenge.
“The global Chamber network is unique and provides an important framework to support local businesses with trade issues, market intelligence and introductions to business communities and ecosystems across the globe.
“NI Chamber has been actively investing in strategic partnerships with Chambers of Commerce in our main markets of Great Britain, Ireland and the US over the past year to support our business through these challenging times for global trade.”
Brian Murphy, Managing Partner, BDO NI added:
“These findings are deeply encouraging, with local businesses performing positively. Northern Ireland is leading the way across the UK in terms of business confidence, with more firms confident about delivering stronger turnovers in 2025 and expecting to increase their profitability.
“As we seek to deliver on this positivity, we need government to work with us. Rather than see the business community as another source ripe for further taxation, the UK government must realise that our pockets are not bottomless. We ask that the Government and the NI Executive work in cooperation with business to tackle the issues that are holding us back from investing, exporting and recruiting more.”
AI adoption
As part of the same survey, NI Chamber members were asked about levels of adoption of AI in their businesses. Most companies have already made (32%) or plan to make (23%) an investment in it in the next three years. However, a significant minority (40%) have no immediate plans to invest in AI.
Large businesses are the most likely to have already adopted or plan to adopt AI, with 42% currently using it. In contrast, only 19% of the largest businesses do not foresee adopting AI, while 48% of small businesses have no plans to implement it.
Good jobs
Members were also asked about their level of awareness of the ‘Good Jobs’ Employment Rights Bill, which aims to enhance worker protections in Northern Ireland.
Opinions on the legislation’s impact on recruitment and retention are mixed. While 30% believe it provides stability in these areas, a significant 45% remain neutral, reflecting a sense of uncertainty. In terms of workplace relations, 41% feel the policy supports positive engagement with employees, yet 32% are undecided, suggesting some ambiguity in its perceived effects.
Addressing the significance of those insights, Suzanne Wylie said:
“Whilst lots of the global issues at play are outside of Northern Ireland’s control, there are still many important issues within the gift of the Executive. Interventions like supporting firms, particularly smaller businesses, with the rollout of AI and considering their perspectives on the progression of employment rights legislation will play a hugely important role in enhancing our competitive proposition.”
Members of NI Chamber can view the report here.
A time for ‘calm heads and careful assessment’ following tariff announcements
3rd Apr 2025
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