The latest Dublin Economic Monitor (DEM), published this morning by the four Dublin Local Authorities, shows that business and economic activity in the region remains strong, to the benefit of multiple sectors and the Capital’s labour market.
The Dublin S&P Global Purchasing Managers’ Index (PMI) remained in expansion mode in Q2 2023. A PMI reading of 54.9 was recorded in the quarter, substantially exceeding the 50 mark which separates growth from contraction. The rate of expansion was marginally weaker than that recorded in Q1 (55.5) but remained significantly stronger than the equivalent rate across the Rest of Ireland (51.4) in Q2. The services and construction sectors were critical to growth in the quarter, but manufacturing remained in contraction which is of concern.
Dublin & Ireland PMI
According to MasterCard data, the value of retail spending by consumers in the Dublin economy continued on an upward trajectory for a ninth consecutive quarter in Q2 2023. The latest MasterCard SpendingPulse™ shows a new index peak of 150.3 was reached in the quarter as growth rates of 1.1% QoQ and 4.7% YoY (SA) were recorded. Entertainment spending (+4.7%) was central to the overall QoQ growth in Q2. The Dublin tourism market produced some mixed retail spending results in Q2. Overall spending grew by 3.1% QoQ, primarily influenced by the US market (+7.6% QoQ), but expenditure from the UK (-15.9%) and German markets (-4.2%) were concerning.
Mastercard SpendingPulse (Total)
Dublin’s unemployment rate remained stable at 5% (SA) in the second quarter of 2023. Employment levels in Dublin reached new heights in Q2 2023. Close to 795,000 residents of the Capital (SA) were in employment in the quarter as 13,500 jobs were created QoQ (+1.7%). Almost 25,000 more residents were in jobs when compared to Q2 2022, representing an expansion of 3.1%. The public sector was the main driver of this growth with 16,900 more residents (+8.7%) engaged in the sector YoY.
Dublin Employment 000s
Foreign Direct Investment (FDI) into the Dublin economy increased by 4% QoQ in Q2 2023, yet remained down by 55% YoY. Over $544 million (SA) was invested in the Capital in the quarter. While 1,916 new jobs (SA) were created, this was down by more than 1,600 jobs (-46.4%) when compared to Q2 2022. The number of FDI projects also receded by 25% YoY to 33 projects (SA) in the quarter. Despite this, FDI investment per capita in Dublin ($474, SA) compared favourably to other European cities in Q2.
FDI Capital Investment Per Capita (SA)
The supply pipeline for Dublin’s housing market strengthened in Q2 with construction commencing on over 3,500 units, reflecting growth of more than 30% both QoQ and YoY. The volume of new units under construction was the strongest in almost two years. Residential property prices in Dublin rose MoM in June 2023, the first such increase this year. Prices increased by 0.3% MoM but remained down by 0.9% YoY. This unexpected MoM increase is in spite of rising interest rates and comes after reductions in each of the eight preceding months.
Dublin House Commencements & Completions
Stability and fragility seem to be the common words being used to describe the economy at the moment. Inflation is hopefully moving off the stage as the main concern but the effects of the higher interest rate medicine are yet to work through fully. A strong labour market but nervy consumer sentiment leaves us casting around for certainty about where the economy goes next.
Andrew Webb, Chief Economist with Grant Thornton
The Dublin Economic Monitor is produced by Grant Thornton on behalf of the four Dublin Local Authorities to provide timely, reliable data and commentary on the economic landscape of the Dublin region. It covers 18 key indicators, consumer spending data from the MasterCard SpendingPulse™ and provides regular insights into different aspects of Dublin’s economy.
