Dublin Economic Monitor

As we move further into 2021, our economic fortunes now feel exclusively wedded to how fast the vaccine rolls out. It is unsurprising, given the restriction levels in place over this recent quarter, that many indicators in this Economic Monitor have moved sharply in the wrong direction. However, hope comes from the evidence of sharp increases in activity that followed previous easing of restrictions as this points towards pent up demand and an economy that will move swiftly through the gears to regain lost ground. A recovery is certain but the timeline, unfortunately, is not.

The strict COVID-19 lockdown in Ireland at the start of 2021 meant further woe for companies in Dublin. Restrictions led to steep reductions in both output and new orders, albeit ones that were less marked than seen during the worst of the pandemic in the second quarter of last year. One positive from the latest set of results was a stabilisation of employment. Firms are seemingly deciding to look through the restrictions in the hope of better days ahead as the planned easing of COVID-19 controls and the ongoing vaccination programme help the economy to reopen.

Elevated spending on necessities and household goods helped overall retail sales activity in Dublin make a small gain at the end of 2020. Restrictions placed tremendous pressure on the discretionary, travel and entertainment sectors. Online sales continued to experience increases through the 2020 holiday season, consistent with spending patterns in other countries. There is speculation that once restrictions are lifted, pent up demand could help the travel, entertainment and restaurant sectors recover.