Northern Ireland’s Productivity Gap: Why Connectivity Projects Matter for Ministers and MLAs

13 Apr 2026

BY Kevin Barry BSc(Hons) MRICS
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Northern Ireland’s Productivity Gap: Why Connectivity Projects Matter for Ministers and MLAs

Northern Ireland has a productivity problem – and it is the Executive’s problem to solve. For more than two decades, key measures of output per hour worked have sat consistently below the UK average, meaning that every hour worked here generates less real economic value than in most other parts of these islands. That shortfall shows up in lower wages, tighter departmental budgets, and less fiscal headroom to invest in the services people care about.^[1]^[2]^[3]

The scale of the gap

The Assembly’s own Research and Information Service is explicit about this. Its 2024 Northern Ireland Economic Overview notes that “Northern Ireland’s productivity gap when compared to the United Kingdom average is another long‑running economic issue”, with GDP per hour worked around 10–12% below the UK average and other productivity metrics showing similar gaps. The underlying message is clear: Northern Ireland does not just have a temporary post‑pandemic problem; it has a structural productivity deficit.^[1]

Independent academic and policy work reinforces that picture. The Northern Ireland Productivity Dashboard 2024, produced by Queen’s University Belfast and The Productivity Institute, shows that in 2022 Northern Ireland’s productivity was around 13% below the UK average and that the region had slipped to 10th out of 12 UK regions on GVA per hour worked. In plain terms, we are competing near the bottom of the UK league table on the single most important driver of long‑term prosperity.^[4]

A January 2025 insights paper from The Productivity Institute, written specifically for Northern Ireland, summarises the situation bluntly: “Northern Ireland persistently lags the UK’s productivity level” despite the Executive holding many of the key policy levers that drive productivity growth. The same paper emphasises that this is not simply a reflection of global shocks; it is the accumulated result of under‑investment, weak connectivity, and missed opportunities over many years.^[2]

Why this matters for the Executive

For Ministers and MLAs, productivity is not an abstract economic curiosity; it is a practical question about how much “bang” Northern Ireland gets for each hour of work in the economy. Output per hour worked – measured in GVA or GDP per hour – is what ultimately underpins sustainable wage growth, business profitability and tax receipts. If Northern Ireland continues to operate 10–15% below the UK benchmark on this measure, then every pound of public spending has to work harder, and every budget round will feel tighter than it needs to be.^[3]^[5]

The 2024–25 Executive Budget briefing from Assembly researchers is clear that this productivity shortfall is a major structural constraint on the public finances. It points to a sectoral mix skewed towards lower‑productivity activities, persistent weaknesses in skills and inclusion, and a relatively small base of high‑productivity export sectors as key factors behind the gap. In practical terms, that means that, even with restored institutions, the Executive is trying to deliver Scandinavian‑level expectations of public services on a tax base that looks more like a mid‑tier OECD region.^[1]

The Productivity Institute’s Northern Ireland insights paper sets out a roadmap for closing that gap by 2040 across six broad areas: skills and human capital; innovation and diffusion; investment, infrastructure and connectivity; institutions and governance; net zero transition; and inclusion. Importantly, “investment, infrastructure and connectivity” is highlighted as one of the areas where Northern Ireland is weakest and where the Executive has the clearest scope to act.^[2]

Programme for Government: the political mandate

The current Programme for Government 2024–2027 – Our Plan: Doing What Matters Most – gives Ministers and MLAs a clear political mandate to link productivity and infrastructure. The PfG commits the Executive to “investing in water and wastewater, roads and transport, and sporting infrastructure” explicitly as a way to support business investment, housebuilding and economic growth. It also pledges to “prioritise the development of high‑productivity sectors through specific programmes to support cluster development” and to accelerate transformational projects under City and Growth Deals.^[6]^[7]

The OECD’s work on the previous Programme for Government framework stressed that Northern Ireland’s wellbeing outcomes were closely tied to productivity performance and that infrastructure and connectivity were key enablers of better outcomes across multiple PfG indicators. The new PfG effectively updates that message: productivity is now part of the core political story, and infrastructure is recognised as one of the main levers the Executive can pull.^[8]

Why connectivity projects belong at the centre

International and local evidence on infrastructure investment is consistent: where there are clear bottlenecks, upgrading transport and other connectivity infrastructure can raise productivity by cutting wasted time, enlarging labour market catchment areas and enabling agglomeration effects. An older but still relevant Assembly research paper on “The role of infrastructure investment in stimulating economic growth” highlights that well‑chosen infrastructure projects can boost both the level and the growth rate of regional output by improving access to markets, reducing business costs and unlocking private investment.^[9]^[10]

More recent Assembly briefings on social and economic infrastructure underline the potential for such investments to enhance both economic and social outcomes – for example, by improving access to employment, education and services for communities currently poorly served by existing networks. In short, infrastructure is not just about concrete and steel; it is one of the main instruments the Executive has to influence where and how value is created in the economy.^[10]

For a Minister considering a strategic connectivity scheme – such as a crossing that removes a known bottleneck, links under‑connected communities into wider labour markets, and shortens journey times between key employment centres – the relevant question is therefore not simply “what is the capital cost?”. The more strategic question is: “does this scheme help move Northern Ireland closer to the UK productivity benchmark over the next decade?”.

The logic is straightforward. A region where journeys are slower, routes more circuitous and labour markets more fragmented will tend to suffer from lower productivity: people spend more time travelling and less time in productive work; firms have smaller pools of talent to recruit from; and supply chains are thinner and more vulnerable. A region that systematically addresses those bottlenecks through targeted connectivity projects will, over time, extract more value from each hour of work.^[11]^[12]

When Northern Ireland is starting from a position where it generates around 10–15% less output per hour than the UK average, the compounding gains from closing that gap are very large. Over a decade or more, even a modest improvement in productivity growth – delivered through better skills, stronger innovation and more effective infrastructure – will generate additional wages and tax receipts that far exceed the up‑front cost of a small number of well‑chosen strategic schemes.^[4]^[1]

The ask of Ministers and MLAs

For Ministers and MLAs in the Executive, the ask is not to treat productivity as a separate technocratic agenda, but to view major infrastructure and connectivity proposals through a productivity lens. The evidence base now available – from the Assembly’s own researchers, from Ulster University, from Queen’s University and from The Productivity Institute – makes it clear that:

Northern Ireland’s productivity gap is structural, persistent and large.^[2]^[4]^[1]
The Executive holds many of the levers needed to close it, including infrastructure and connectivity.^[6]^[2]
The Programme for Government already commits the Executive to using those levers to support higher‑productivity growth.^[7]^[6]

Against that backdrop, the choice is not between “spending on roads” and “supporting productivity”. In the right locations, strategic connectivity projects are one of the main ways to deliver the productivity uplift that the PfG – and the evidence – say Northern Ireland now urgently needs.

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