A new economic review from the four local authorities in Dublin points to an advancing recovery in the capital and its hinterland. In sum, an assortment of indicators suggests the turnaround in the city is well under way and that activity is accelerating at a quicker rate than in the State at large.
No surprise there. Capital cities tend to do pretty well as economic conditions improve. But the first edition of the quarterly Dublin Economic Monitor collates an array of data that already shows action in some sectors back to peak levels or close enough to their peak.
Some growth strains are evident too, a phenomenon not seen for years in the city, and something that could ultimately hamper recovery. Separate data from the Central Statistics Office indicates that the income gap between Dublin and the rest of the State has begun to widen again after narrowing in the aftermath of the crash.
Recovery narrative
With the general election on the horizon, the political backdrop to all this is intriguing.
If the Government’s re-election strategy centres on the recovery narrative, then the turnaround in Dublin might play into its hands. But the Dublin electorate is notoriously volatile. No fewer than 47 Dáil seats are in play in 12 constituencies, and relentless fiscal retrenchment has weakened Labour in particular.
The new Dublin monitor, prepared by DKM consultants, is positive is its overall assessment. The unemployment rate in the city region dropped to 8.9 per cent in final quarter of 2014, down from a crash-time peak of 13 per cent in 2011 and well ahead of the 10.4 per cent national unemployment rate.
Almost 17,000 people took up work in Dublin last year, 13,400 of them in the services sector. Indeed, employment in services is almost back at peak levels. This is important. The increase in services activity flows from growth in other economic sectors.
There is more. A big rise in public transport trips since the crash also reflects a higher level of activity. Dublin Airport arrivals are returning to peak levels. Similarly, Dublin Port traffic is back at the peak.
Traffic volumes at the tolled section of the M50 ring road continue to rise.
The Markit Dublin purchasing managers’ index points to a sharp increase in business output in the opening months of 2015, albeit at a lower rate than in 2014.
A Dublin consumer sentiment index from KBC Bank and the Economic and Social Research Institute is at its highest level for 12 years . Some 68 per cent of consumers surveyed in Dublin expect the economic situation to improve in the next year.
Property market trends in Dublin are already well-documented. While residential prices in the region rose a lot more quickly than the rest of the State, there is tentative evidence that new Central Bank loan caps have stabilised the market .
For all the controversy surrounding that endeavour, the fact remains that it was undertaken to prevent another bubble. At the same time, the price of renting a house or apartment continues to climb.
In the commercial sector, office rents in Dublin are strongly up and office vacancy rates are sharply down. Top-grade accommodation is very scarce in central Dublin, prompting concern that it could weaken foreign direct investment.
Quite how all this plays out in the exceedingly picky milieu of Dublin politics remains uncertain.
Annihilation
Remember, Fine Gael was all but crushed in city in the 2002 general election. In 2011, Dublin annihilated Fianna Fáil. The best it can hope for next time is a tiny handful of seats.
Although Labour won the most Dublin seats in 2011, conventional assessments suggest it could be next to suffer a drubbing. In that event, Sinn Féin would be the more likely beneficiary than the hard-left faction. Indeed, Sinn Féin’s rivals believe it is in line for a seat in every Dublin constituency.
Labour seems certain to incur losses in Dublin. It will run fewer candidates in the hope of taking one seat in each constituency, and the party will need to achieve that result, or come close to it, to regain a decent place in government. Fine Gael transfers could prove crucial, but that party too has ground to make up.
Also crucial is whether opinion poll support for Independents and others dissolves or delivers a big wedge of seats in addition to those currently held.
