The latest Dublin Economic Monitor, published this morning by the four Dublin Local Authorities, shows a solid economy in Q3 2024, with growth driven by employment, retail spend and private sector activity.
Dublin & Ireland PMI
The Dublin S&P Global Purchasing Managers’ Index (PMI) showed that business activity in the Capital’s private sector continued to increase in Q3 2024. The PMI reading for Dublin increased to 52.8, up from 52.4 in Q2, and above the 50 mark which denotes growth. On a sectoral basis, there was a renewed expansion in manufacturing, with a PMI reading of 53.7. The construction sector also saw accelerated growth with an index reading of 53.2, up from 51.9 in Q2, which likely reflects the increasing volume of units being added to Dublin’s housing stock. These expansions, combined with continued growth in the Services sector (51.5), meant that all three monitored sectors recorded growth for the first time since Q2 2022.
Dublin Unemployment Rate
Dublin’s unemployment rate rose by marginal proportions in Q3 to reach 4.7% (SA), marking the first such increase of the year, as employment levels across the Dublin economy continued to climb to reach a new peak of over 829,000 (SA). Data from Indeed highlights Dublin job postings fell 9.4 percentage points below the 2020 baseline but gradually increased throughout the month.
Mastercard SpendingPulse
According to MasterCard data retail spending in the Dublin economy increased in Q3 2024 for the 17th consecutive quarter, albeit at a more subdued rate than the previous quarter. Total expenditure increased by 0.3% QoQ and 1.1% YoY in Q3. This ongoing growth signifies continued consumer confidence and willingness to spend, tempered somewhat by cost of living issues and interest rates which are at relatively high levels compared to recent years. Spending growth in Q3 was subdued in the four major categories of the retail sector which are tracked. Entertainment (+0.3%) and Necessities (+0.2%) were the only categories in which expenditure rose in the quarter. Discretionary and Household Goods sales were flat.
Dublin House Commencements & Completions
In the residential sector, housing completions across Dublin reached a new high point in Q3 2024, as the volume of new units entering the Capital’s housing stock reached almost 3,900 units (SA). This represented an increase of 71.6% QoQ and 4.8% YoY. In contrast, housing commencements declined by 19.9% QoQ but remained elevated with 6,056 new residential units under construction in the quarter. This represented an 85.4% increase YoY and will continue to feed through to completions in the coming quarters.
FDI Capital Investment Per Capita, Rolling 4 Quarter Average
Based on a rolling 4 quarter average, foreign direct investment (FDI) into Dublin declined in Q3 2024, following exceptional Q2 growth. Average capital investment over the 4 quarters decreased by 1.9% QoQ and 9.6% YoY to $831 million. Investment in absolute terms in Q3 fell to $282 million, having reached over $1,400 million in the previous quarter. In spite of this, Dublin compared favourably with other locations for both FDI per capita ($732.18) and average project value ($32 million) based on a rolling 4 quarter average.
As election season draws to a close, the fortunes of an incoming government will be significantly influenced by the economy. There will be relief then that the economy appears to be in rude health. All sectors of the economy have contributed to solid expansion in Dublin’s private sector activity over Q3 of this year and employment in the capital has reached a new peak. All in all, the economy is providing good cheer but the next government’s in-tray will have plenty in it to ensure Dublin’s economy continues on this path.
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.
