There were “concerning” slowdowns in manufacturing and construction activity in Dublin in the fourth quarter of last year, but the capital’s main economic indicators were broadly stable, according to data from local authorities.
The latest Dublin Economic Monitor shows that full employment was countered by slowing activity – notably in business sentiment indicators and residential construction.
The fourth quarter Dublin S&P Global Purchasing Managers’ Index (PMI) stood at 49.9 in the fourth quarter, 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 the fourth quarter, though employment expanded for an eighth consecutive quarter.
According to MasterCard data, the value of retail spending by consumers in Dublin grew by 1.2 per cent quarter-on-quarter and 6 per cent year-on-year.
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 fell 1 per cent quarter-on-quarter in a “disappointing outturn” which was at odds with the national level where spending grew by 3.7 per cent.
Dublin’s unemployment rate receded slightly to 4.8 per cent. Employment growth of 1.1 per cent year-on-year was a contributory factor with industry and construction representing the main drivers on the back of expansions of 5.6 per cent and 20.9 per cent respectively.
ICT – which covers the currently embattled tech sector – recorded a contraction of 7.3 per cent (6,600 jobs) year-on-year.
This edition of the Dublin Economic Monitor looks towards a year ahead that should see inflation continue to influence prospects while loosening its grip
The capital’s housing market recorded a mixed conclusion to 2022. Residential transaction levels rose by 69 per cent as more than 3,000 units were sold in December alone.
House prices fell by a combined 0.6 per cent across the three months of the fourth quarter, but remained up by 6 per cent, 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 the fourth quarter, 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 per cent in the fourth quarter compared with the previous year.
Imports declined to the greatest extent (6.5 per cent), though exports also fell in the quarter (2.9 per cent).
Dublin Airport passenger numbers also fell. Despite growth of two million passenger journeys (44.3 per cent) a quarter-on-quarter reduction of 18.7 per cent 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,” the monitor noted.
Grant Thornton chief economist Andrew Webb 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.”
