Economic output in Northern Ireland grew by 0.2 per cent in the final quarter of 2025, marking a tentative recovery from a mid-year contraction, according to the latest official statistics. The Northern Ireland Composite Economic Index (NICEI) Quarter 4 2025 figures, published today by the Northern Ireland Statistics & Research Agency (NISRA), show the economy expanded by 1.6 per cent over the year compared with the same quarter in 2024, and by 2.1 per cent on an annualised basis. However, growth remains unevenly distributed across sectors.
The data show that Northern Ireland continues to outperform the United Kingdom as a whole, where GDP increased by 0.1 per cent over the quarter and 1.0 per cent over the year. However, the quarterly growth rate represents only a partial bounce-back from the 0.5 per cent contraction recorded in Quarter 3 2025, when the economy fell back from a series high reached in Quarter 2.
Sector Performance: Construction Surges as Services Slump
The final three months of 2025 presented a divided economic picture. Construction emerged as the primary engine of growth, contributing 0.6 percentage points to the quarterly figure. Yet this gain was entirely offset by decreased activity in the services sector, which subtracted 0.8 percentage points and accounts for the largest share of the region’s economic activity.
Over the full year, contributions were more broadly positive across sectors:
- Construction added 0.5 percentage points to annual growth
- The public sector contributed 0.5 percentage points
- Production added 0.4 percentage points
- Services contributed 0.3 percentage points
Despite the services sector’s poor showing in the final quarter, it still managed to contribute positively to the annual figure, suggesting the decline may reflect temporary factors rather than a sustained downturn.
Public Sector Expansion Outpaces Private Enterprise
A notable divergence appears between public and private sector performance. Public sector output increased by 0.8 per cent over the quarter and 2.1 per cent over the year, while private sector output rose by just 0.1 per cent quarterly and 1.5 per cent annually. This disparity raises questions about the balance of the recovery and the relative weakness in private enterprise, which typically drives long-term productivity gains.
Recovery Context and Long-Term Trends
Despite recent volatility, the Northern Ireland economy has recovered substantially from the pandemic downturn. Output now stands 11.2 per cent above the pre-pandemic level seen in Quarter 4 2019, and 34.3 per cent above the series low recorded in Quarter 2 2020. The economy has now shown growth in 21 of the last 40 quarters, though the path has been characterised by sharp fluctuations rather than steady expansion.
The data cover the period October to December 2025, meaning they capture economic conditions before any potential impacts from policy changes anticipated in 2026. The estimates are based on business surveys and remain subject to revision as more complete information becomes available.
Critical Questions for Policymakers
The latest release leaves several important considerations unanswered:
- How does the 1.6 per cent annual growth translate to real household living standards, given that the data do not account for inflation or cost-of-living pressures?
- What specific factors drove the services sector contraction in Quarter 4, and does this signal broader weakness in retail, hospitality, and business services?
- Can the construction sector maintain its momentum if the services sector continues to underperform?
- Is the current trajectory of public sector growth sustainable amid fiscal constraints, and what does the relative weakness in private sector output mean for long-term productivity?
- Will Northern Ireland continue to outperform the UK average if Westminster implements further economic policy changes in 2026?
The absence of ministerial commentary in this statistical release leaves a gap in the public narrative around these figures. While the data demonstrate resilience, they also reveal an economy heavily reliant on public spending and construction activity, with the services sector—the traditional backbone of modern economies—showing signs of strain.
The next quarterly release, due in June 2026, will be critical in determining whether the modest Q4 rebound represents a genuine stabilisation or merely a pause in an uneven recovery. Detailed data tables and methodology are available from NISRA’s dedicated NICEI portal.