Dublin business activity rises in early 2025, but momentum slows amid tariff worries

Dublin’s private sector started 2025 on a positive note, with new figures showing continued growth in business activity—though at a slightly slower pace than late last year.

According to the latest Purchasing Managers’ Index (PMI) survey from S&P Global, the capital posted a headline rate of 52.6 in the first quarter of 2025, a dip from 54.7 in Q4 2024.

While the figure remains above the crucial 50-point threshold that signals expansion, the report suggests that growing uncertainty around the implementation of US trade tariffs could weigh on performance in the coming months.

Outside of the capital, the pace of growth was even more modest, with the Rest of Ireland recording a PMI of 52.4.

A closer look at the sectors driving the capital’s economy reveals a mixed picture.

Manufacturing activity in Dublin slipped into contraction for the first time in three quarters, with a reading of 48.9. Meanwhile, the Construction sector, though still strong, saw growth slow to 57.8 from 59.6 in the previous quarter.

The Services sector followed a similar pattern, recording 53.4 compared to 55.1 at the end of 2024.

In contrast, the Rest of Ireland saw gains in Manufacturing (52.2) and Services (55.6), while Construction activity fell to 48.8, indicating a contraction.

New orders in Dublin continued their upward trend, extending a run of growth that now spans five consecutive quarters.

However, the latest figure of 52.0 marks the joint-slowest rate of expansion in the past year, suggesting a more cautious business outlook. The Rest of Ireland edged ahead here, with a slightly quicker rate of new business growth at 52.7.

Job creation provided another note of cautious optimism.

Employment in Dublin ticked up with a reading of 51.2, showing companies are still hiring, albeit at a modest rate. Compared to the same period last year, however, job growth has slowed from a stronger 53.9. The Rest of Ireland showed a similar trend, with job creation measured at 51.4.

Commenting on the findings, Andrew Harker, Economics Director at S&P Global Market Intelligence, noted:

“The Dublin private sector made a positive start to 2025, with business activity rising on the back of higher new orders.

“There was good news for the labour market as well, with the pace of job creation picking up.

“The picture in the capital was broadly similar to across the Rest of Ireland in the early part of the year.

“One slight area of concern was a reduction in manufacturing output which limited the overall pace of growth.

“This will hopefully be a temporary blip and we’ll see growth return in the second quarter, with the fall perhaps representing some caution in the sector amid uncertainty around US trade policy.”

As the year unfolds, businesses in both Dublin and beyond will be keeping a close eye on the international trade landscape, with hopes that stability will support renewed growth across all sectors.