The latest PMI survey shows that business activity continued to recover strongly in Dublin in Q3 following the reopening of the economy.
The headline rate accelerated to 62.1 from 60.2 in Q2, its highest level since 2014.
All three of the monitored sectors of construction, services and manufacturing posted substantial increases with the latter rising at its fastest rate in the more than twenty year series history.
Output across the rest of Ireland rose at a similarly sharp pace.
The IHS Markit Dublin Purchasing Managers Index (PMI) is a survey of business activity in Dublin calculated using responses from around 200 businesses per month across the services, manufacturing and construction sectors.
The Overall PMI is based on the output/business activity question from each survey. An index reading above 50 indicates an overall expansion in activity, below 50 an overall contraction.
For the second consecutive month there was strong growth in new orders with the pace quickening to its fastest level since 2014.
New orders outside Dublin, while also showing a marked increase, were slightly softer. These robust new orders trends signal the potential for strong activity in the coming quarters.
Rising workloads fed into further hiring with Dublin companies increasing their staffing levels at the fastest rate since 2018.
This marks the third sucessive quarter where companies in Dublin increased their staffing levels. Employment expanded across the Rest of Ireland at a similar rate to Dublin.
The acceleration in business activity in the capital and across Ireland in Q3 was driven by pent up demand following sucessive lockdowns.
This surge in demand coupled with global supply side issues is leading to price increases which have the potential to threaten economic recovery in the short term.
Commenting on the PMI, Andrew Harker, Economics Director at IHS Markit said:
“The economic recovery in Dublin continued in full swing during the third quarter, with rates of expansion in activity, new orders and employment all quickening from Q2.
“The particularly steep growth rates we’ve seen since the economy reopened will likely prove unsustainable, especially given some of the supply constraints being felt by firms at present, but there’s no reason why companies shouldn’t settle into a solid and sustainable period of expansion as the year comes to an end.”