The economy of Northern Ireland is the smallest of the four constituents of the United Kingdom and the smaller of the two jurisdictions on the island of Ireland. At the time of the Partition of Ireland in 1922, and for a period afterwards, Northern Ireland had a predominantly industrial economy, most notably in shipbuilding, rope manufacture and textiles, but most heavy industry has since been replaced by services. Northern Ireland's economy has strong links to the economies of the Republic of Ireland and Great Britain.

Overview

Output and economic growth In 2023, Northern Ireland had the smallest economy of any of the twelve ITL 1 regions of the United Kingdom, at £63.3 billion; this is partly because Northern Ireland has the smallest population. Northern Ireland's GDP per capita stood at £32,944 in 2023, exceeding that of both North East England (£28,583) and Wales (£29,316). Northern Ireland also experienced the largest increase in real GDP of any ITL 1 region in 2023, at 2.1%.

Rural areas including the North West are particularly deprived. It suffers from the highest unemployment and highest poverty rates in Northern Ireland.

Throughout the 1990s, the Northern Irish economy grew faster than the rest of the UK, due in part to the rapid growth of the economy of the Republic of Ireland and the so-called "peace dividend". An April 2007 survey found Northern Ireland's average house price to be one of the highest in the UK, behind London, the South East, and the South West. It also found Northern Ireland to have all of the top ten property "hot spots", with the Craigavon and Newtownards areas increasing by 55%. However, as of 2018, Northern Ireland house prices are the lowest on average in the UK, approximately 40% lower than before the bubble burst in 2008.

Employment Unemployment in Northern Ireland has fallen substantially in recent years, and in early 2024, it was at 2.1%."Northern Ireland's economic fears". Ryan, Orla; BBC, 22 June 2001. Retrieved on 17 June 2006. In 2024, working-age economic inactivity is 26.7%. Pivotal website, Economic Inactivity in Northern Ireland, article dated May 1, 2024Economic Overview . Northern Ireland DETI. 2006. Retrieved on 17 June 2006. Youth unemployment and long-term unemployment have fallen most quickly.

Northern Ireland's macroeconomy is also characterised by considerably longer actual working hours and lower gender income disparity than in the United Kingdom as a whole. UK Government website, House of Commons Library section, Income and inequality: How does Northern Ireland compare with the UK as a whole?, article published 28 June 28, 2023

Challenges in the 2020s The Northern Ireland economy has been adversely affected by Brexit, COVID-19 and the collapse of Stormont. Queen's University Belfast website, Short and Long-Term Impact of Covid-19 on the Northern Ireland Economy: March 2021 Belfast Telegraph website, NI Business Activity Down as a Lack of Stormont Casts Dark Cloud over Economy, article by Margaret Canning dated August 14, 2023 BBC website, Brexit: The NI Protocol and its economic impact, article dated February 4, 2022

Brexit The Northern Ireland Protocol created a de facto customs border in the Irish Sea between Northern Ireland and Great Britain, leading to major changes in imports and exports. BBC website, Brexit: What is the new Northern Ireland trade deal?, article dated February 2, 2024 Economic Observatory website, How is Brexit Affecting Northern Ireland's Economy?, article by Esmond Birnie dated February 1, 2021 The Conversation website, New Brexit deal will be better for Northern Ireland’s economy than the protocol, research suggests, article by Geoffroy Duparc-Portier and Gioele Figus dated March 3, 2023

Effects of the COVID-19 pandemic The economy of Northern Ireland was negatively impacted by the lockdowns and travel restrictions necessitated by the COVID-19 pandemic. The tourism and hospitality industry was particularly hard hit. These sectors "have been mandated to close since 26 December 2020, with a very limited number of exceptions" and many restrictions were continuing into April 2021. Hotels and other accommodations, for example, "closed apart from only for work-related stays". Restaurants and pubs were restricted to take-away service. In February 2021, the government said it would not consider "reopening hospitality before mid-summer".

In late March, owners and operators of many types of businesses signed a petition "calling for the economy to reopen" and requested a "proper timetable plan" for rebuilding the economy. The content also discussed the "catastrophe" that the lockdowns and restrictions had created. Government assistance was available; the £25,000 Retail, Hospitality, Tourism and Leisure Grant was closed by 25 March 2021 but "a further payment" was to be made to eligible businesses.

Some restrictions were expected to be loosened in mid April but tourism was expected to remain very limited. Anyone entering NI and planning to stay for a day or longer was required to "self-isolate for 10 days"; this did not apply to those on "essential" trips. Everyone entering NI was required to provide evidence of a negative COVID-19 test.

Restrictions were fully relaxed after two years in February 2022. BBC website, Covid-19: Remaining restrictions in NI are lifted, article dated February 15, 2022

The collapse of Stormont Stormont has been collapsed on six occasions in 25 years, most recently from February 2022 to February 2024. This has led to instability in the economy. Pivotal website, Governing without government: the consequences, article dated September 4, 2023CIPD website, Stormont is back – But what should it focus on?, article dated February 22, 2024 ITV website, 'Economic blackmail' as Northern Ireland loses share of £1bn over Stormont collapse, article dated November 20, 2023

Investment Foreign direct investment was restrained by The Troubles; Economic Observatory website, The Good Friday Agreement at 25: has there been a peace dividend?, article by Graham Brownlow, David Jordan and John Turner dated April 3, 2023 however, since the signing of the Good Friday Agreement, investment in Northern Ireland has increased significantly. Most investment has been focused in Greater Belfast and to a lesser extent Greater Derry. Major projects have included the Victoria Square Shopping Centre Belfast City Centre and Titanic Quarter waterfront development. The Laganside Corporation was previously at the forefront of the redevelopment along the banks of the River Lagan. The Cathedral Quarter has also seen substantial investment. In Derry, the ILEX Urban Regeneration Company no longer exists. The area is 12th in terms of funding despite it being the second city.

In 2024, key industries in Northern Ireland include aerospace, agriculture, construction, engineering, health technology, manufacturing, services and tourism. NI Business Info website, Overview of Northern Ireland business, retrieved June 4, 2024 Finance and creative digital areas are also strong in Belfast. Belfast City Council website, Key Sectors, retrieved June 4, 2024

Agriculture

Agriculture in Northern Ireland is heavily mechanised. In 2000, agriculture accounted for 2.4% of economic output in Northern Ireland, compared to 1% in the United Kingdom as a whole.. Eurostat. 2005. Retrieved on 17 June 2006. As in the rest of the United Kingdom, livestock and dairy account for the majority of agricultural output. The main crops are potatoes, barley, and wheat.

By 2021, Northern Ireland was self-sufficient in food production and was able to export more than half of its meat and crops to the rest of the UK and beyond. Fact Check NI website, Does Northern Ireland produce enough to feed 10 million people?, article dated November 16, 2021

Manufacturing

Machinery and equipment manufacturing, food processing, textile and electronics manufacturing are the leading industries. Other industries such as papermaking, furniture manufacturing, aerospace and shipbuilding are also important, concentrated mostly in the eastern parts of Northern Ireland.

Northern Ireland experienced a period of steep manufacturing growth between 1998 and 2001.Quarterly Economic Review . Northern Ireland DETI. October 2005. Retrieved on 17 June 2006.

Engineering is the largest manufacturing sub-sector in Northern Ireland, particularly in the fields of aerospace and heavy machinery. Major employers are Moy Park, Spirit AeroSystems, Caterpillar and Seagate.

Harland and Wolff, which in the early 20th century was the world's biggest shipbuilder, suffered from intense international competition during the 1970s and 1980s and declined rapidly. During the 1990s the company diversified into civil engineering and industrial fabrication, manufacturing bridges and oil platforms. The vast works on Queen's Island were downsized, with much of the land (including the slipway where RMS Titanic was built) sold off for redevelopment in the 2000s as the Titanic Quarter. In April 2023, the Belfast shipyard completed its first new vessel in over twenty years, a barge for the waste management company Cory. The company was also awarded a £1.6 billion contract to deliver three naval support ships for the Royal Fleet Auxiliary as part of the Team Resolute consortium. However, in September 2024, Harland & Wolff Group Holdings PLC entered administration after the company failed to secure long-term financing. between 50 and 60 immediate redundancies were announced, while staff at the four operational shipyards were not affected. In January 2025, Spanish state-owned shipbuilder Navantia UK completed the acquisition of Harland & Wolff's facilities in Belfast, Appledore, Methil and Arnish, protecting more than 1,000 jobs across the four sites.

Services Services account for almost 70% of economic output, and 78% of employees.

In the third quarter of 2024, a majority of economic growth came from the service sector.

Public sector

In 1992 the public sector accounted for 37% of the workforce.

In December 2008 the public sector in Northern Ireland accounted for 30.8% of the total workforce; this is significantly higher than the overall UK figure.

By 2022, the public sector accounted for 27% of NI jobs, compared to 18% across the UK.Northern Ireland Government website, Business Register and Employment Survey, dated September 26, 2023

In total in 2006, the British government subvention totalled £5,000m, or 20% of Northern Ireland's economic output. This had risen to £11,547m in 2009–10 during the "Great Recession", and then fell back to £9,160m in 2013–14. A 2017 article by a research professor at the Economic and Social Research Institute quantified the transfers at 10.8 billion Euro annually. In late 2018 The Irish Times estimated that the subvention had risen to £10.8 billion, about a quarter of Northern Ireland's GDP.

Currency

The official currency in use in Northern Ireland is the British pound sterling. The euro, in use in the Republic of Ireland, is also accepted by some retailers.

Three Northern Irish banks print their own sterling-denominated banknotes: Bank of Ireland, Danske Bank, and Ulster Bank.

First Trust Bank also printed sterling-denominated banknotes until 2019, when a commercial decision was made to cease printing operations. First Trust banknotes stopped being legal tender on 30 June 2022.

The central bank of the UK is the Bank of England.

Energy

Energy policy in the province is set by the Department for the Economy.

Primary energy consumption (yearly) Source GWh %Coal 1,169.1 14.4Oil 24.3 0.3Gas 4,178.1 51.5Wind 2,439.8 30.0Solar 162.7 2.0Hydro 15.2 0.2Other renewable 364.1 4.5Net Imports −236.8 −2.9Total 8,119.5 100

Electricity