NI Chamber’s Q1 2025 Quarterly Economic Survey 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. Of particular note are the region’s positive export performance indicators in Q1 for both Manufacturing and Services businesses, showing significantly better results than the rest of the UK.
The positive performance in the early part of the year should act as both a testament to the resilience of our businesses and a clarion call for policymakers to navigate the current challenges carefully and ensure that they do all they can to sustain this momentum.
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.
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 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 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 when it came to cashflow, ranking fifth across the UK regions.
Employment growth expectations improved across both sectors and recruitment challenges showed signs of easing, albeit from a significant level.
These results correlate strongly with the most recent NI Composite Index, with output showing a 3.6% increase over the year. And whilst it is encouraging to report a relatively positive performance during Q1, in an illustration of how quickly the trading environment can change, the past week has presented considerable challenges, which present a real and substantial test for NI businesses.
It remains a complex picture and even with a 90-day pause, we know that US tariffs will have ramifications for businesses in Northern Ireland. In response, our politicians must be 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 had been actively engaging with policymakers in Westminster, Brussels, Stormont and Dublin since January and this has intensified in recent weeks. 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 continue to negotiate. It is imperative that Northern Ireland’s unique trading circumstances are given specific consideration in this complex set of negotiations and decisions on measures to protect our economy and our businesses.
One of the unique strengths of Chambers is their global Chamber network and right now, it 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. Just last week, we welcomed the Director General of British Chambers of Commerce to Northern Ireland, for a series of joint engagements with Chambers Ireland. And of course, that followed our business mission to North Carolina last month, which is already paying dividends for NI based firms in sectors like med-tech and clean-tech.
As part of the same economic survey, NI Chamber members were asked about levels of adoption of AI in their businesses. Most companies have either 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. Clearly, more support is needed to ensure that adoption levels vastly increase.
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. The Department for the Economy carried out a consultation on the high-level considerations last summer. 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.
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, particularly when it comes to costs and ease of implementation, will play a hugely important role in enhancing our competitive proposition, which could prove to be crucial.
