Nearly one in three small and medium-sized enterprises across Northern Ireland say rising costs and uncertainty are now hindering their growth, according to new survey data.

The proportion of firms reporting that wider business pressures are affecting expansion rose to 31 per cent in the first quarter of 2026, up from 23 per cent at the end of 2025. Over the same period, those seeing no impact slipped from half to just 34 per cent.

Rising energy costs remain the dominant concern. Some 56 per cent of businesses cited it as a challenge, with electricity the main driver: 86 per cent of those affected pointed to climbing power bills. Other fuels such as petrol and heating oil troubled 58 per cent, while gas was an issue for 34 per cent. Construction, hospitality and manufacturing firms were especially squeezed, though the pressure was evident across all sectors and company sizes.

Beyond energy, the cost of supplies, insurance and transport also weighed heavily. Notably, the share of firms flagging transport costs jumped from 11 per cent in late 2025 to 32 per cent in the first quarter of 2026, reflecting fuel-linked anxieties.

Despite the headwinds, employment held steady. Most businesses maintained staffing levels, and there was no sign of widespread planned redundancies. Six in ten firms reported they were profitable, and 55 per cent described trading conditions as stable. A further 39 per cent recorded growth.

The survey, conducted in March and April, followed heightened global tensions that unsettled energy markets. Businesses with cross-border sales bucked the broader trend, reporting improved performance and a higher likelihood of profitability, underscoring the value of market diversification.