2026 Outlook: Skills, Rules and Tech That Keep SMEs Ahead

By Stephen McConnell, Business Services Partner, Baker Tilly Mooney Moore

Northern Ireland’s production sectors showed growth through mid-2025, with output rising over the year, but the picture is mixed and firms must prepare for a choppy 2026. Recent government data shows production increased year-on-year, yet broader indicators point to slowing demand and tighter margins.

For manufacturers, the priority is clear. Invest in practical digital skills that cut waste and raise throughput. Basic data literacy, shop floor connectivity and simple automation deliver quick returns and reduce reliance on costly overtime. Test small systems on one line or product before wider rollout so staff learn by doing and the business can measure impact.

Construction faces another set of pressures. Recent PMI readings for the island show activity falling and input costs rising, which squeezes margins and raises the risk from late regulatory changes or planning delays. Firms should embed basic compliance checks into project workflows and make small tech investments that improve cost and material tracking. Clear ownership of digital tools prevents knowledge bottlenecks when projects are under pressure.

Engineering companies, especially those supplying advanced manufacturing and agri-tech, should focus on skills that match customer demand. The Department for the Economy’s employer skills survey highlights ongoing gaps in technical and digital abilities, signalling a need for steady, on the job training rather than one-off courses. Partnering with local colleges or industry groups can speed up access to apprentices and short courses.

Across sectors, regulatory change is a constant. Plan for routine compliance by turning requirements into simple daily checks and by assigning clear responsibility for reporting. Doing so reduces the chance of costly last-minute fixes when rules change or audits arrive.

Macro forecasts suggest the UK economy will see modest growth into 2026, but uncertainty remains and local surveys have recorded contraction in private sector activity in recent months. That means firms should prioritise low-risk technology that improves cash flow or reduces labour hours. Work out the minimum tech that solves a real pain and scale from there.

Culture still matters but in a supporting role. A workplace that values steady learning and short experiments makes it easier to adopt new tools and meet rules without drama. Small, practical steps on skills, compliance and targeted technology will help Northern Ireland’s manufacturing, construction and engineering firms move into 2026 more resilient and better able to seize the opportunities that come with change.

Building strong links with local innovation hubs and sector bodies will pay dividends. Collaboration with universities, research centres and peers gives early insight into emerging tech, funding opportunities and best practice. Sharing experiences helps reduce risk and cost, and strengthens the regional ecosystem, making it easier for Northern Ireland firms to compete nationally and globally in 2026 and beyond.