Dublin’s private sector has surged ahead as the clear driver of Ireland’s economy in early 2026, with new data showing a sharp rise in business activity across the capital while the rest of the country struggles to keep pace.
The latest Purchasing Managers’ Index from S&P Global reveals that Dublin recorded a headline reading of 55.6 in the first quarter of the year, a significant jump from 53.2 at the end of 2025 and the strongest performance since mid 2022.
Any figure above 50 signals growth, underlining the scale of expansion currently underway across the city.
In contrast, business activity outside the capital dipped slightly into contraction territory, with the Rest of Ireland index falling to 49.7.
The figures paint a clear picture of a two speed economy, with Dublin acting as the engine of growth while other regions face a more uncertain outlook.
Growth in the capital has been driven by strong performances in construction and manufacturing.
Construction activity surged to 60.7, while manufacturing rebounded sharply to 59.9.
The services sector al-so expanded, though at a slower pace than previously, posting a reading of 52.4.
Outside Dublin, the picture was more mixed. Services and construction recorded only marginal growth, while manufacturing activity fell back into contraction at 48.0.
There was also a notable divergence in new business. Companies in Dublin reported a strong increase in new orders, with the index rising to 56.4, the fastest rate of growth in four years.
Meanwhile, firms across the rest of the country experienced their first drop in new orders since late 2023.
The rise in demand in Dublin has led to an increase in employment, although the pace of hiring remains modest.
The capital’s employment index came in at 51.2, indicating continued but cautious job creation.
Interestingly, staffing levels grew slightly faster outside Dublin, suggesting businesses elsewhere may be preparing for a potential rebound.
Despite the strong start to the year, there are warning signs on the horizon.
Ongoing geopolitical tensions, particularly in the Middle East, are creating uncertainty for businesses, with concerns around rising energy costs, supply chain disruption and overall confidence.
Andrew Harker, Economics Director at S&P Global Market Intelligence, said Dublin’s performance had been decisive in shaping the national picture.
“Dublin acted as a growth engine for the Irish economy in the opening quarter of 2026, posting much sharper increases in output and new orders than had been seen at the end of 2025,” he said.
“In fact, the expansion in the capital contrasted with a slight fall in business activity across the Rest of Ireland.
Whether the strong performance over the opening quarter will continue into Q2 remains to be seen, with companies now having to contend with higher prices, supply chain disruption and economic uncertainty as a result of the war in the Middle East.”
For businesses and workers across Dublin, the figures point to a strong start to 2026, with construction sites busy, factories ramping up production and new orders flowing in.
However, the gap between the capital and the rest of the country is widening, raising questions about how evenly economic growth is being shared and whether Dublin’s momentum can be sustained in the months ahead.