The latest Dublin Economic Monitor, published this morning by the four Dublin Local Authorities, shows that economic growth remained robust in early 2024 with rising business activity, falling unemployment, and strong retail spending to the fore.
Dublin & Ireland PMI
The Dublin S&P Global Purchasing Managers’ Index (PMI) showed solid rates of growth in the first quarter of 2024. The PMI reading for Dublin rose to 53.1 from 51.9 in Q4 2023, comfortably exceeding the 50 mark that separates growth from contraction. On a sectoral basis, growth in activity was driven by an acceleration in the dominant services sector (54.1). The construction sector returned to growth (51.9) following a weak final quarter of 2023. Activity levels in Dublin’s manufacturing sector dipped marginally below the 50 mark (49.9) in Q1.
Unemployment Rate
Dublin’s unemployment rate fell to 4.8% (SA) in Q1, as employment continued to increase reaching a new peak of 812,800 (SA). This comes in spite of receding job postings in the Dublin economy. Data from Indeed shows that job vacancies posted on their website continued on a broad downward trajectory in the first five months of 2024. The total number of jobs postings fell 5.1 percentage points (pp) below the 2020 baseline in May, predominantly in line with the preceding months.
Mastercard SpendingPulse
According to MasterCard data, retail spending in Dublin continued on an upward path in early 2024 despite the lingering effects of inflation, and relatively high interest rates. Expenditure by consumers in the Capital rose by 0.9% QoQ and 2.9% YoY in Q1 with broad growth across most categories. The QoQ growth rate in Q1 was primarily driven by Necessities sales, which rose in value by 1.7% QoQ. This may be a partial reflection of consumers increasingly choosing to eat and drink at home – a theory further supported by a decline in Entertainment spending at hotels, bars and restaurants of 2.5% in the quarter.
Dublin House Commencements & Completions
In the residential sector, housing completions contracted sharply in Q1 2024, falling by 35% QoQ and 25.2% YoY. Contrastingly, new residential commencements recorded sustained growth of 8.6% QoQ and 58.2% YoY in the quarter. This will be expected to feed through to greater completions later in 2024 and into 2025. Despite rising supply, average residential rents in Dublin rose above €2,000 for the first time in Q3 2023 and grew further to €2,035 in the final quarter of the year.
FDI Capital Investment Per Capita, Rolling 4 Quarter Average
Based on a rolling 4 quarter average, foreign direct investment (FDI) into Dublin declined in Q1 2024. The average capital investment fell by 15% QoQ and 53.4% YoY to $622 million. This was due to a slow start in Q1 where just $338 million was invested. All European cities analysed using fDi Market data recorded a decrease in FDI projects in Q1 2024, due in part to slowing economic growth across the region – though FDI per capita based on a rolling 4 quarter average compared favourably in Dublin for the quarter at $540.7 million.
The economic mood is more upbeat heading into the second half of 2024. Forecasters are lifting their expectations for growth now that inflation appears to be under control. Improvements in global trade, continued strength in the labour market and interest rate cuts on the horizon are all adding to a renewed positivity. This is reflected in solid performance across key business and consumer spending indicators in this latest Dublin Economic Monitor.
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.
