Private Sector Back In Growth Mode In May

The latest survey from Ulster Bank has revealed that the private sector returned to growth mode last month (May 2025), which is always a very encouraging sign. This is the first increase in the last 6 months so it will be heartily welcomed by businesses across Northern Ireland.

The Ulster Bank produces a ‘business activity index’ and this index rose from 47.0 in April to 50.9 in May, which is quite a significant increase. The Ulster Bank index is a well respected signifier of how the economy is faring, as it contacts 200 businesses across the region who give their feedback for the survey. The businesses are picked from a broad spectrum featuring all the major sectors of the economy, namely the construction, services, manufacturing and retail sectors.

Retail Activity Declined Once More But At A Slower Rate

Here are some pointers from the survey, as copied from an article by Ryan McAleer on the Irish News website. It reads:

‘Three out of the four sectors saw activity rise during May.

‘Construction output posted its first increase in seven months, services activity expanded again, and manufacturing production continued to grow.

‘While retail activity still decreased, the rate of decline was much less severe than in the prior period. New orders continued to fall for the seventh consecutive month, but the pace of contraction eased considerably, marking the least pronounced fall since last November.

‘Employment levels continued to decrease for the fourth month running, though the rate of job losses slowed compared to April.

‘Some firms reduced staff to lower costs, while others cited difficulties finding suitable recruits.

‘Companies continued to face steep increases in input costs, mainly attributed to recent rises in the national minimum wage and employer national insurance contributions.

‘However, the pace of input price inflation softened for the second month and was the weakest so far in 2025.

‘Selling prices also rose sharply, albeit at a slightly slower pace than before, but Northern Ireland recorded the steepest increase in output prices among all 12 UK regions and nations8.

‘Looking ahead, sentiment regarding the year-ahead outlook for business activity saw a significant improvement in May compared to April.

‘Despite this pick-up, business confidence in Northern Ireland remained the lowest across the UK.’

A Brighter Picture Is Beginning To Unveil Itself

Finally, in the same article, Sebastian Burnside, chief economist at Ulster Bank, is quoted as saying on this latest report:

“If these trends continue in the months ahead, we will hopefully see firms looking to take on additional staff, although the twin pressures of rising overheads and difficulties finding suitable staff were reported again in May,” he said.

“While higher staff costs continued to push up overall input prices, inflationary pressures softened since April, again painting a brighter picture as we head towards the mid-point of the year.”