The latest PMI Survey shows that business activity hits 7 year high in Q3 following the reopening of the economy.
The latest PMI survey from IHS Markit shows that business activity continued to recover strongly in Dublin in Q3 following the reopening of the economy. Activity accelerated to 62.1 from 60.2 in Q2, its highest level since 2014. Activity increased across all three of the monitored sectors. Manufacturing recorded its fastest growth rate in more than 20 years. Output across the rest of Ireland rose at a similarly sharp pace.
There was strong growth in new orders with the pace quickening to its fastest level since 2014. New orders outside of Dublin were slightly softer. These robust new orders trends signal the potential for strong business activity in the coming quarters.
Rising workloads fed into further hiring with Dublin companies increasing their staffing levels at the fastest rate since 2018. This marks the third successive quarter where companies in Dublin increased their staffing levels. Employment expanded across the Rest of Ireland at a similar rate to Dublin.
The acceleration in business activity in the capital and across Ireland was driven by pent up demand following successive lockdowns. This surge in demand coupled with global supply side issues is leading to price increases which have the potential to threaten economic recovery in the short term.
Commenting on the PMI, Andrew Harker, Economics Director at IHS Markit said:
“The economic recovery in Dublin continued in full swing during the third quarter, with rates of expansion in activity, new orders and employment all quickening from Q2. The particularly steep growth rates we’ve seen since the economy reopened will likely prove unsustainable, especially given some of the supply constraints being felt by firms at present, but there’s no reason why companies shouldn’t settle into a solid and sustainable period of expansion as the year comes to an end.”