Since my last column, quite a few things have changed. For a brief spell in June the sun even shone – something Northern Ireland had almost forgotten.
A US-Iran agreement reopened the Strait of Hormuz, Sir Keir Starmer announced he will step down as Prime Minister, and the political spotlight is now on Andy Burnham as the presumptive prime minister-in-waiting.
Things can turn around quickly in politics, and sometimes business and household sentiment can change just as rapidly.
However, fixing the structural problems in a large economy like the UK can take some time, and Mr Burnham is promising a 10-year mission to raise living standards across the land.
Nonetheless, a few weeks of good weather, lower fuel prices and greater international stability can have a surprisingly positive impact on spending and household confidence.
Businesses across Northern Ireland are reporting a notably more upbeat mood, although nobody is suggesting the challenges have disappeared.
That cautious optimism is reflected in the many conversations that the CBI is having with chief executives across the country.
Retailers report that consumer spending has become more typical for the time of year after a subdued start to 2026 (Jonathan Brady/PA)
Some firms are reporting a gradual improvement in trading conditions, with household demand levels improving and easing fuel prices all helping to offset the continuing pressures from high operating costs.
Retailers report that consumer spending has become more typical for the time of year after a subdued start to 2026.
The spell of good weather in June and lower fuel cost stemming from the recent Middle East peace agreement, have helped improve confidence among households and companies alike.
The hospitality sector has also seen encouraging signs that people are spending more on their products and services.
One hotel group has seen food and drink sales rise by approximately 4%, while corporate bookings are also reported to have improved.
Belfast hotels saw occupancy rates average around 80% during June, with major music festivals pushing occupancy to full capacity on peak nights.
However, businesses in coastal areas are continuing to feel the impact of a decline in American visitors, highlighting the uneven recovery across the sector.
Tourism NI’s latest performance update suggests that one in five consumers across Northern Ireland and the Republic are scaling back long-haul travel because of financial pressures and geopolitical uncertainty, with more people opting for shorter breaks closer to home. That trend could benefit many parts of the local economy.
Businesses report that own-brand supermarket products remain an important part of household shopping baskets, while demand for protein products remains relatively resilient although sales of dairy and some other food categories have weakened.
Another trend increasingly highlighted by retailers and restaurants is the impact of GLP-1 drugs weight loss medications.
Businesses report that consumers are buying less food, choosing smaller portions and spending differently. Hospitality operators are responding by introducing smaller plates and healthier menu options.
The transition towards cleaner transport also appears to be gathering pace.
Electric vehicles now account for 18% of new car sales in Northern Ireland, with businesses reporting continued growth in demand for charging infrastructure and renewable energy solutions. Higher fuel prices also encouraged greater use of public charging networks.
Despite higher interest rates, many companies are committed to investing in automation, innovation and renewable energy.
Although admittedly, many argue that investment levels would be much higher were they not held back by slow planning decisions, water constraints and increasingly complex regulation. But nonetheless, investment is happening!
Together these developments point to a more positive direction of travel.
Some improvement, but the challenges are far from over:
However, firms still warn that the challenges are far from over. Supply chains have not yet fully recovered from global disruption.
Transport and logistics costs remain elevated due to fuel surcharges that continue to filter through supply chains following recent Middle East tensions.
Although chemicals shortages linked to the conflict have eased for most companies, some manufacturers are still experiencing supply constraints and higher prices.
Labour market challenges remain a significant concern. Employers across several sectors, particularly construction, transport and manufacturing continue to struggle to recruit skilled and technical staff, maintenance technicians and even drivers – although some firms report that the availability of job applicants has improved slightly.
Encouragingly for employers, wage pressures appear to be moderating. Typical annual pay settlements are now between 2 and 4%, significantly lower than in recent years, while some firms have even frozen pay following larger increases previously.
However, when it comes to the labour market the CBI warns that planned reductions to ApprenticeshipsNI eligibility later this month could have long-term consequences.
Companies fear limiting access for existing employees will undermine skills development and productivity at a time when labour shortages remain acute.
Inflation is another important metric to watch. Businesses are hoping that inflationary pressures in the second half of the year will be lower than previously expected as geopolitical tensions ease.
Food service inflation is likely to come in at 4%, about half what was forecast (Alamy Stock Photo)
Food service inflation was forecast to rise to 7-8% by September, but an increase of around 4% now appears more likely.
Falling oil prices and lower home heating costs have brought some relief to local households, and many large firms have protected themselves by fixing gas and electricity prices for up to three years.
Nevertheless, many chief executives expect gas and electricity prices to remain vulnerable because of reduced global liquefied natural gas supplies and damage to international energy infrastructure.
A weaker pound against the US dollar is also limiting the benefits of cheaper oil imports.
For this reason, firms will most probably continue to invest heavily in renewable technologies, including solar power, heat pumps, electric vehicles and renewable gas, both to improve resilience and meet sustainability goals.
In summary, there is a growing sense that the economy could be turning a corner as some pressures have lifted.
But the CBI concludes that while business and household confidence has improved and inflation is expected to ease, firms will remain focused on reducing costs and increasing productivity.
Business leaders believe that government action on planning reform, labour costs and the cost of doing business will be critical if Northern Ireland is to build on any tentative recovery that might emerge.
- Angela McGowan is director of CBI Northern Ireland