Latest Dublin Economic Monitor shows mixed economic fortunes

The latest Dublin Economic Monitor (DEM), published this morning by the four Dublin Local Authorities, shows that the Capital’s main economic indicators are broadly stable, with full employment countered by slowing activity – notably in business sentiment indicators and residential construction.

The Q4 Dublin S&P Global Purchasing Managers’ Index (PMI) stood at 49.9 in Q4, marginally below the 50 mark, which separates contraction from growth.

An expansion in services sector activity (52.7) was more than offset by concerning slowdowns in manufacturing (47.2) and construction (45.1).   New orders also fell in Dublin in Q4, though employment expanded for an eighth consecutive quarter.

According to MasterCard data, the value of retail spending by consumers in Dublin in Q4 grew by 1.2% QoQ and 6% YoY (SA).

Despite easing in the quarter, Inflation remained at a high level and likely contributed significantly to the increasing value of retail expenditure amongst Dublin consumers.

Spending by visitors to Dublin stagnated (-1% QoQ) in the quarter in a disappointing outturn which was at odds with the national level where spending grew by 3.7% QoQ.

Dublin’s unemployment rate receded slightly to 4.8% (SA) in Q4.

Employment growth of 1.1% YoY was a contributory factor with industry and construction representing the main drivers on the back of YoY expansions of 5.6% and 20.9% respectively.

ICT – which covers the currently embattled tech sector – recorded a contraction of 7.3% (6,600 jobs) YoY.

The Capital’s housing market recorded a mixed conclusion to 2022. Residential transaction levels rose by 69% YoY as more than 3,000 units (SA) were sold in December alone.

House prices fell by a combined 0.6% across the three months of Q4 2022, though remained up by 6% YoY, while rents maintained an upward trajectory across the city and county.

New residential commencements and completions in Dublin declined for a second consecutive quarter in Q4, as new supply in 2022 fell short of the 2021 total.

In the transport and travel sectors, the volume of throughput handled at Dublin Port fell by 4.3% QoQ in Q4. Imports declined to the greatest extent (-6.5%), though exports also fell in the quarter (-2.9%). Dublin Airport passenger numbers also surprisingly fell in Q4 2022.

Despite growth of 2 million passenger journeys (+44.3%) YoY, a QoQ reduction of 18.7% passenger journeys was recorded. This may be a reflection of the rising costs of air travel combined with slowing economic activity in key inbound tourist markets.

Commenting on the DEM’s findings, Andrew Webb, Chief Economist with Grant Thornton, said:

“This edition of the Dublin Economic Monitor reflects on a period of yet more economic concern and looks towards a year ahead that should see inflation continue to influence prospects while loosening its grip.

“Although key economic indicators are indicating a sluggishness, the economy is expected to avoid recession in 2023. Consumer and business confidence, both of which have endured significant recent declines, will be watched with interest to see if the great resilience that has been evident will sustain.”