The completion of Newry Canal proved to be a transformative moment for the town, helping to fuel the growth of its textile industry. Within a decade of its completion, Newry was already establishing itself as a player in the Irish linen trade. The Irish Linen Board's notice of 1749, published in the Belfast Newsletter, offers one of the earliest records connecting Newry to the trade. The notice announced a new seal system for lappers whose job it was to inspect linen being brought to market, to measure and refold it, before applying an official seal to certify its quality and dimensions. They were essentially quality controllers in the linen trade. Newry was listed alongside Dublin, Derry, Coleraine, Antrim, Armagh and Lurgan as an approved location for a guarantor highlighting the town's growing standing in this trade. The system was not without its problems; persistent fraud and rising complaints from English buyers forced the Irish Linen Board to act. In 1759 lappers were replaced by the more formally appointed Seal Masters. The new title was no guarantee of honest conduct. In 1765, one Cormuck McCawley of Newry was publicly discharged for fraudulently sealing brown linen, his name printed in the Belfast Newsletter alongside others as a caution to all dealers in the trade.
Despite such incidents, Newry’s commerce continued to expand. To accommodate this the foundations of a new Market House were laid in December 1752 on a portion of the Earl of Hillsborough's Liberty that would become Margaret Square. Funded by subscription from the Earl and several local gentlemen, it was built expressly for the better accommodation of the Yarn and Linen Market. The building's connection to the textile trade proved remarkably enduring. As late as 1841, long after its conversion into a Sessions House, a Miss Duff was employing several hundred women in the veining of muslin – an openwork technique using ladder-like stitches to join two pieces of cloth - using the Grand Jury Room to receive and pay for the work
The processing of linen required specialist facilities, with the 1761 Wren map of the town showing bleach mills operating along the Mill Race in the area adjacent to what is now the Downshire Road Orange Hall. A 1767 advertisement in the Belfast Newsletter confirms the scale of this operation, describing a facility capable of bleaching 2,000 pieces of linen per season, equipped with water supplies, furnaces, drying lofts, and workers' quarters. The memory of this industry lingered long in the town. In 1815 an elderly resident, Charles Havern, recalled seeing two bleach greens in the area that is now occupied by Jack Murphy’s jewellers and Santander Bank. These were open areas used for spreading cloth on the ground to be whitened by sunlight.
Beetling was another essential stage in linen finishing, a process whereby fabric was wound onto a beam and pounded by wooden hammers for several weeks to produce a characteristically flat cloth with a lustrous sheen. That this specialist trade was active in Newry is confirmed by a 1766 advertisement placed by John Dickinson of Sugar Island, offering imported rock maple beetling beams for sale.
The reach of Newry’s linen industry extended far beyond its hinterland. In March 1757, the Dublin Journal recorded that 107,081 yards of linen from Newry had entered the London Custom House. Its importance is further shown by a 1764 notice delaying the sailing of the Judith at the request of local drapers, and by a 1767 advertisement for the brig Garnett, which offered organised, cost-free shipping arrangements through agent Arthur Hughes. This level of coordination highlights the central role of linen in Newry’s commercial life.
