News

Northern Ireland's economy demonstrated steady progress in the second quarter of 2024, with growth measured at 0.4%, resulting in a 2.3% increase over the past year, according to the latest official figures. The Northern Ireland Composite Economic Index (NICEI) indicates that the private sector was the primary driver of this growth, with output rising 0.5% from April to June, bringing the annual increase for the sector to 3%. This performance is particularly noteworthy given the 0.2% contraction in public sector output during the same period, which is down 0.1% compared to the previous year.

The growth of Northern Ireland's economy is primarily attributed to the construction and services sectors.

The construction industry has reached a 15-year high, with output increasing by 3.4% in Q2 2024, resulting in a remarkable 10.5% increase over the past year. The growth in the second quarter was driven by ‘repair and maintenance’ (+7.2%), ‘other work’ (+13.6%), housing (+2%) and ‘new work’ (+2.6%).

The services sector has been instrumental in shaping the economic landscape of Northern Ireland. Encompassing banking, law, accountancy, and management consulting, this sector is outpacing the broader economy, underscoring its vital contribution to the region's recovery and growth. Its swift expansion can be partially attributed to the adoption of hybrid working models, enabling businesses to hire talent in Northern Ireland to service contracts across Great Britain and internationally.

Challenges in Manufacturing

In contrast to the encouraging growth in the private sector, the manufacturing industry is experiencing ongoing challenges. Output in this sector has continued to decline, influenced by global uncertainties and high financial costs.

Terex, one of Northern Ireland’s largest manufacturing employers, recently announced further cost-cutting measures, highlighting the pressures faced by manufacturers amid geopolitical tensions and rising borrowing costs. Despite these difficulties, optimism remains for a rebound in the sector, with expectations of stabilisation in the global economy over the next year.

Unemployment at Record Low

The economic indicators are further complemented by a record low unemployment rate of 1.9% in Northern Ireland during the April to June quarter, marking the first time it has dipped below 2%. This decline in unemployment underscores the strength of the job market in a period of economic expansion and growth.

The Road Ahead

Looking forward, forecasts indicate a more favourable outlook for the Northern Ireland economy, projecting a 1.1% GDP increase in 2024, with further acceleration to 1.8% in 2025.

But the Republic of Ireland is expected to outperform Northern Ireland, with growth rates of 2.3% in 2024 and 4.3% in 2025.

 Supporting Growth with CavanaghKelly

As Northern Ireland’s economy continues to evolve, businesses across various sectors require tailored support to navigate both growth opportunities and challenges. At CavanaghKelly, we provide a comprehensive range of services designed to help small and growing businesses, SMEs, as well as regulated sectors, thrive in this dynamic landscape. Our audit and accounting expertise ensures that businesses remain compliant and financially sound, while our advisory services - including business support, M&As, and restructuring - deliver the strategic guidance necessary for sustainable growth. Additionally, we specialise in tax services, assisting businesses with complex tax planning, R&D claims, and estate management to optimise their financial health.

Whether your business is looking to expand in a burgeoning market or adapt to challenging conditions, CavanaghKelly is here to provide the support and expertise you need to succeed in Northern Ireland’s ever-changing economic environment.