Northern Ireland’s private sector continued to contract last month, a new report from Ulster Bank suggests.
The lender’s monthly purchasing managers index (PMI) showed activity in the north’s services, construction and retail sectors all in negative territory during March.
The respected business survey, which is based on the feedback from 200 firms, indicates manufacturing was the only sector to register growth last month.
Businesses were surveyed between March 12 and 27, meaning most responses came before the UK Chancellor’s Spring Statement and ahead of Donald Trump’s tariff announcements on April 2.
Manufacturing activity increased sharply in March, according to Ulster Bank, and at the fastest pace since September last year.
Overall, the PMI suggests output in the Northern Ireland private sector decreased for the fourth month running.
Ulster Bank’s report said while output decreased again last month, and at a marked pace, the latest reduction was the softest in 2025 so far.
The survey said reduced demand and a drop in customer footfall were the principal factors leading output to fall.
Northern firms also posted a fifth successive monthly reduction in new orders during March.
“Where a fall in new orders was recorded, panellists mentioned a reluctance among customers to commit to new projects,” said the report.
“The manufacturing sector bucked the wider trend and posted a renewed expansion in new orders.”
The survey also pointed to private sector employers scaling back employment for the second month running in March.
Meanwhile, there were signs of further inflation, with 46% of respondents reporting an increase in their input costs.
The pace of inflation was the strongest since February 2023 and the most pronounced of the UK regions covered by the report.
It was principally driven by manufacturing and retail.
Most respondents linked higher input costs to rising wage pressures and the imminent increase in employer national insurance contributions.
In contrast to PMI reports published last year, where Northern Ireland was the standout performing the UK, the latest NatWest report ranked Northern Ireland at the bottom of the UK regional table for both business activity and future activity.
It also marked a contrast with the latest quarterly economic survey from the Northern Ireland Chamber, which ranked the north’s manufacturing and services sectors among the best performing in the UK.
“Market conditions remain challenging and recent tariff announcements suggest we could see continued challenges in the coming months,” said NatWest’s chief economist, Sebastian Burnside.
“Firms up and down the country are looking to control costs, which is feeding through to staffing decisions.
“Price pressures remain high across the board, though they did at least subside slightly in most areas in March, on the eve of the changes to national insurance contributions and national minimum and living wages.”
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