The latest PMI survey shows that business activity in Dublin stagnated in Q4, ending a six quarter sequence of expansion.
The latest PMI survey, from S&P Global, shows that business activity in Dublin stagnated in Q4, ending a six quarter sequence of expansion. The headline rate dipped to 49.9, from 50.4 in Q4 indicating a marginal contraction in overall activity. On a sectoral basis, both Manufacturing (47.2) and Construction (45.1) posted reductions in output in Q4 while the robust Services sector (52.7) continued to record a solid increase in activity. Output across the Rest of Ireland in Q4 remained narrowly within expansionary territory (50.5).
Looking forward, the New Orders measure signals potential economic hardship in 2023. At 48.1, New Orders in the capital contracted in Q4, which outside of Covid restricted times is the first decrease since 2012. The Rest of Ireland also recorded a decrease in New Orders, albeit at 49.2, it was softer than seen in the capital. These New Order trends are concerning as the effects of interest rate hikes will likely only begin to be felt in the quarters to come.
On the Employment side, labour market trends remained resilient in Q4 as Dublin firms increased their staffing levels for the eighth consecutive quarter. At 52.3 the rate of job creation was solid, but slowed to the weakest level since Q1 2021. Employment also increased across the Rest of Ireland, but at a slower pace.
Business activity in Dublin and Ireland was stagnant in the final quarter of 2022. Trends in new orders suggest that activity will remain constrained in the coming quarters.
Commenting on the PMI, Andrew Harker, Economics Director at S&P Global Market Intelligence said:
“Dublin firms are feeling the pinch at present as waning demand acts to limit business activity both in the capital and across the Rest of Ireland as well. Growth in the service sector was cancelled out by falling activity across manufacturing and construction in the final quarter of 2022. On a more positive note, however, firms are still taking on extra staff, perhaps hoping that any soft-patch will prove to be short-lived.”