The Northern Ireland economy is set to outperform the UK average over the next five years, according to a new forecast by Ulster University economists. This optimistic outlook is attributed to the resilience of the jobs market, which has seen a significant increase in workforce jobs, outpacing the rest of the UK. The Economic Policy Centre (EPC) at Ulster University has upgraded its growth forecast for Northern Ireland to 1.6% for this year, up from 1.3% at the end of last year. In contrast, the UK's 2026 forecast has been downgraded from 1.4% to 1%.
The EPC's positive view is based on the strong employment growth in Northern Ireland, which has been a key driver of economic performance. Between the first quarter of 2025 and the first quarter of 2026, the workforce jobs measure increased at the fastest annual rate in any UK region. This is in stark contrast to the nine UK regions where employment actually fell during the same period. The EPC assistant economist, Todd Gowdy, predicts that workforce jobs will exceed one million by 2032, indicating a sustained period of economic growth.
However, the reasons behind this economic growth are not entirely clear. Some economists suggest that the relatively large public sector in Northern Ireland acts as a buffer, with public sector jobs being less susceptible to cuts compared to the private sector. Others point to the positive spillovers from the strong economy in the Republic of Ireland. Despite remaining part of the EU's single market for goods post-Brexit, Northern Ireland has not seen significant job creation in manufacturing, with the EPC forecasting a lower number of jobs in this sector compared to the previous decade.
The EPC's forecast was made before the recent flare-up in the conflict in the Persian Gulf, which has led to a sharp rise in energy prices. This uncertainty in global energy markets could impact economic expectations for inflation and interest rates, potentially affecting the forecast's accuracy. Nonetheless, the EPC's optimistic view highlights the importance of the jobs market in driving economic growth in Northern Ireland, and the potential for continued outperformance compared to the UK average.
