Northern Ireland saw a solid increase in employment in July, making it the only area of the UK to record job creation, according to the latest Ulster Bank Regional Growth Tracker.

The headline Business Activity Index, which measures the combined output of the private sector, rose to 49.7, signalling a near-stabilisation of the private sector at the start of the third quarter.

The positive employment figures were registered despite continued challenges, including a reduction in output and new orders, and persistent inflationary pressures. The overall reduction in output was most notable in the manufacturing sector, although increased activity was seen in construction and retail. Sebastian Burnside, Chief Economist for Ulster Bank, commented that while demand conditions remained subdued, the solid increase in staffing levels, which was the fastest since September 2024, was a positive sign. He said greater resources should "hopefully help lead to a pick-up in business activity."

The report found that input costs continued to increase sharply, with the pace of inflation remaining the fastest of the 12 monitored UK regions and nations, largely due to higher staff costs. New orders also fell for the ninth consecutive month. Despite this, firms remain optimistic that output will rise over the coming year, although sentiment eased slightly to a three-month low.