The latest Dublin Economic Monitor, published this morning by the four Dublin Local Authorities, shows the rude health of the economy in Q2 2024. Despite an easing in business activity, the economy is experiencing increased retail spending, employment levels and foreign direct investment.
Dublin & Ireland PMI
The Dublin S&P Global Purchasing Managers’ Index (PMI) showed a softening in activity in Q2 2024. The PMI reading fell from 53.1 in Q1 to 52.4 in Q2, but remained above the 50 mark that separates growth from contraction. The services sector in Dublin continued to drive growth in Q2 with a robust index reading of 54.0. There was also a further increase in construction activity (51.9) which likely reflects the acceleration in housebuilding in the Capital in recent quarters. In contrast, a deepening downturn was registered in manufacturing, which has been in contraction for seven of the last eight quarters, with the headline rate slipping to 46.5 from 49.9 in Q1.
Mastercard SpendingPulse
According to MasterCard data retail spending in the Dublin economy continued to increase in Q2 2024, maintaining the moderate growth rate recorded in the previous quarter. Total expenditure increased by 0.7% QoQ and 2.3% YoY in Q2. Spending by consumers has now risen QoQ in every quarter for four years, despite challenges including the Covid-19 pandemic. Growth in Q2 was driven by Entertainment spend which increased by 1.5% QoQ, thus providing the hospitality sector with a fillip in what has been a challenging period. A 1.2% increase QoQ in sales in department and clothing stores, further supports the theory that consumers are gradually spending more on ‘non-essential’ areas.
Dublin Unemployment Rate
Dublin’s unemployment rate fell to 4.5% (SA) in Q2, as employment levels amongst Dublin residents gained further momentum to reach a new peak of 826,600 (SA). This comes in spite of a gradual descent in Dublin job postings which have been moderately declining towards more ‘normalised levels’. Data from Indeed shows jobs posting for the Capital fell 13.6 percentage points (pp) below the 2020 baseline in August.
FDI Capital Investment Per Capita, Rolling 4 Quarter Average
Based on a rolling 4 quarter average, foreign direct investment (FDI) into Dublin increased rapidly QoQ in Q2 2024, following a slow start to the year. Average capital investment over the 4 quarters increased by 36% QoQ to $846m. This was driven by a strong Q2 which saw capital investment in absolute terms more than quadruple QoQ to $1,452 million. Further, FDI per capita in Dublin based on a rolling 4 quarter average compared favourably internationally at $736 in Q2.
Dublin House Commencements & Completions
In the residential sector, housing commencements across Dublin reached a new peak of over 7,500 in Q2 2024. This represented an increase of 74% QoQ and a more than doubling YoY in what is a boost for the residential stock in the Capital. In April alone, construction commenced on almost 6,000 units, the highest monthly total since records began in 2011. Housing completions also recorded an increase in the quarter, rising by 3% QoQ, and adding 2,250 (SA) new units to the housing stock.
“As we head into Budget season, this DEM suggests almost all is well. Activity in the private sector is up for the sixth consecutive quarter and consumer spending in the capital has sustained an upward trajectory that began four years ago. Employment in Dublin remains strong and the exceptional FDI numbers noted in this edition are a welcome boost after a slow start to the year. One note of caution comes via national unemployment figures – with over 16,000 more unemployed nationally than one year ago, we are less able to call the strength of the labour market with absolute certainty. We will watch labour market indicators particularly closely over coming editions.”
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.
