A Growing Economy Needs a Place to Grow

As the Assembly returns for its final months before breaking for the 2027 election, Northern Ireland’s economy presents our politicians with something of a dilemma. With all statistics pointing towards a healthy, resilient economy that has shed post-Covid damage and recovered better than regions in Britain, a major issue faces those tasked with responsibility for planning the economy: Northern Ireland does not have enough homes to house the workers needed to fully capitalise on and extend this growth.

The base picture of the economy is a healthy one: the Department for the Economy’s latest stats show growth of between 0.7% and 0.9% in 2026’s first quarter, with services output growing by 2.3% and production output growing by 7.6% annually. Ulster Bank reporting shows that private sector activity expanded sharpy in mid-2026, leading regional UK growth metrics in August. Overall, output now sits between 11.3% and 12.1% above Q4 2019 levels, showing a significant recovery and indeed improved upon pre-Covid economic levels.

The labour market also shows good health, with NISRA statistics showing an unemployment rate of just 2% across Q2 2026. Wage growth also increased by 4.9% annually in Q2 2026, ahead of Northern Ireland’s expected inflation average of 3.1% throughout 2026.

Where wage growth does not stack up, crucially, is in comparison to average house prices, which rose by 9.2% year-over-year in the same period according to NISRA, now standing at £202,487. Price increases might once have been thought to signal a healthy housing market, but in Northern Ireland in the present day, the explanation is a much less positive one.

Housing prices are on the rise because there simply aren’t enough houses. As has been seen in the Republic, a market that cannot satisfy demand creates price increases through scarcity. That scarcity is borne out in Housing Executive waiting list stats, which now top over 50,000 households, almost 40,000 of whom are in housing stress.

Only 86 social housing development programmes were started in Q2 2026, with 395 completions. While Minister for Communities Gordon Lyons was hailing a 17% annual increase in social home building across the financial year 2025/26, the reality is that this still only amounted to 1,765 new home starts, a figure below the 1,786 started in 2018/19. While recovery is to be welcomed, the stats show that capacity is not nearly where it needs to be to satisfy demand.

The private sector also shows contradictory signs. While construction output fell on a quarterly basis in Q1 2026. It rose by over 10% annually and housing output increased by 7.6% over the quarter. In Q2 2026, just 1,571 dwellings were completed. These are not issues of private contractors and housing associations, who of course have the will to build as much as possible, but a problem of capacity and skills. The construction sector remains an important source of economic activity and employment, but the question is whether the public sector framework and funding is in place to maximise the capacity, investment, and pipeline to deliver the volume of housing Northern Ireland needs. Added to these constraints is an onerous planning system that delays the developments that are ready to build.

The Minister for the Economy, Dr Caoimhe Archibald MLA, and her predecessor, Conor Murphy, have both emphasised the need to build indigenous renewable energy, both for decarbonisation and local economic development, but the question of skills and capacity that afflicts housebuilding will affect the construction of onshore and offshore wind assets. With infrastructure issues, most notably an inability to connect newbuilds to wastewater infrastructure already stretched beyond capacity, the creation of an environment that promotes a production-focused economy will certainly be to the fore of Minister Archibald’s and her officials’ thoughts.

The challenge for the Executive over the next six months, then, is not simply to protect Northern Ireland’s economic recovery, but to create the conditions that allow it to continue. Housing, infrastructure, skills and energy are not separate challenges to economic growth, but fundamental parts of it. If Northern Ireland is to attract investment, create jobs and retain the people needed to fill them, it must have the homes and infrastructure to support that ambition. The next Assembly mandate will therefore need to place capacity at the heart of its economic thinking, ensuring that the foundations are in place to turn a resilient economy into a genuinely growing one.