Momentum remains strong in the North West, with strategic investment and skills development key to sustaining growth.

The latest economic analysis from UUEPC and DCSDC highlights a mixed but cautiously optimistic outlook for Northern Ireland and the North West. After strong job growth in 2024, the pace of employment expansion is slowing, with NI forecast to add 0.7% in 2025 and 0.5% in 2026. Overall GVA growth remains modest at 1.3% in 2025, improving to 1.6% in 2026, reflecting both domestic pressures and global uncertainties, including rising tariffs and geopolitical tensions.

In the North West, Derry and Strabane have experienced positive labour market trends, with payrolled employees rising steadily. DCSDC’s employment rate improvements have largely been achieved through declining unemployment, underpinned by sectoral growth in Health & Social Care, Construction, IT, and Professional Services. Despite these gains, challenges remain: retail continues to face long-term decline, economic inactivity persists, particularly among those affected by long-term sickness and childcare barriers, and demographic shifts indicate a shrinking working-age population.

The business environment is also facing pressures from rising labour costs, including increases in National Insurance contributions and the National Living Wage, disproportionately impacting employers with lower-paid or part-time staff. While these costs may incentivise capital investment in automation for some sectors, smaller and service-based businesses have limited flexibility, potentially constraining growth.

Looking ahead, the Chamber continues to advocate for targeted investment and policy interventions to support sustainable growth. Priorities include reducing barriers to workforce participation, supporting skills development, and encouraging productivity gains through innovation and infrastructure investment. City and Growth Deal projects, alongside public capital investment, will play a critical role in enabling the North West to realise its potential.

Overall, the region benefits from strong fundamentals and a favourable labour market, but future prosperity depends on coordinated action to address inactivity, demographic pressures, and business cost challenges, ensuring the North West remains an attractive place for investment, enterprise, and employment.