issue 12
february 2018
In this issue LATEST DUBLIN ECONOMIC DATA IHS MARKIT DUBLIN PMI KBC/ESRI CONSUMER SENTIMENT MASTERCARD SPENDINGPULSE DUBLIN’S ECONOMY MAINTAINS MOMENTUM BUT HOUSING CHALLENGES PERSIST
PAGE 12
HOW SMART CITY TECHNOLOGIES ARE SUPPORTING DUBLIN’S COMPETITIVENESS By Jamie Cudden, Smart City Programme Manager, Dublin City Council.
PAGE 14
DUBLIN'S HOTEL PERFORMANCE TO REMAIN STRONG THROUGH 2018 Sarah Duignan, Director of Client Relationships, STR
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WELCOME
HIGHLIGHTS Dublin's unemployment rate continued to decline in Q3 2017 to reach 6.1%. Residential rents in Dublin gathered pace in Q3 2017 to exceed an average of â‚Ź1,500 per month. Residential property prices recorded YoY growth of more than 10% for a fifth consecutive month in October 2017. Public transport trips increased at an exceptional rate of 5 million passenger journeys or 10.1% YoY in Q3 2017 to stand close to 55 million trips. Passenger arrivals at Dublin Airport reached a new monthly peak of 1.24 million arrivals in September 2017. Housing completions in Dublin strengthened to 620 in November 2017 but commencements have followed a more inconsistent pattern in recent months. Dublin Mastercard SpendingPulse Retail spending in Dublin recorded strong increases in Q4 2017 with particularly robust YoY growth in household goods expenditure, while the US market was vital to growth in total spending by tourists. The Dublin MARKIT PMI Dublin PMI data increased at a robust and accelerated pace in Q4 2017, completing another strong year for the private sector. KBC/ESRI Consumer Sentiment Consumer sentiment in Dublin fell back in Q4 2017 as a minor reversal in attitudes towards personal financial situations and lower confidence with respect to making major household purchases were recorded. image: grafton street, 2018 conor mccabe photography
Welcome to the February 2018 issue of the Dublin Economic Monitor
T
he Dublin Economic Monitor is a joint initiative on behalf of the four Dublin Local Authorities, and is designed to be of particular interest to those living and doing business in Dublin or considering locating here. It is produced by EY-DKM Economic Advisory Services, with KBC/ESRI delivering the Dublin Consumer Sentiment data and IHS MARKIT delivering the Dublin Purchasing Managers' Index (PMI). We are delighted to launch a new partnership with Mastercard to use their SpendingPulse reports to better understand retail spending and tourism expenditure patterns patterns. The spending pulse is derived from anonymized and aggregated card transaction data as well as other means of payments such as cash and Dublin City Council
South Dublin County Council
cheques. This data will help the city develop new insights on the spending patterns of Dubliners and tourists, as well as comparing the Capital's performance to the whole of Ireland (see centrefold supplement). The special articles this quarter include a feature from Jamie Cudden, Smart City Programme Manager, Dublin City Council on how Smart City technologies are supporting city competitiveness (p.12). Sarah Duignan, Director of Client Relationships, STR assesses the Dublin hotel market and its growth potential for 2018 (p.14). We hope you find the Monitor useful and welcome any feedback. You can sign up to our quarterly mailing list and access the Monitor online at www. dublineconomy.ie. The next release will be published online on 3rd May 2018. Fingal County Council
DĂşn Laoghaire Rathdown County Council
This document provides general information on the Dublin economy. It is not intended to be used as a basis for any particular course of action or as a substitute for financial advice. The document is produced independently by EY-DKM Economic Advisory Services; the views and opinions expressed are those of the relevant author, and do not necessarily reflect the views of the Dublin Local Authorities. The Dublin Local Authorities disclaim all liability in connection with any action that may be taken in reliance of this document, and for any error, deficiency, flaw or omission contained in it.
2 //
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ECONOMY
GLOBAL ECONOMY
NATIONAL ECONOMY
Global growth in 2017 was more robust than expected, reaching 3.7% on the back of strengthening economic performances in Europe and Asia in particular. This momentum is forecasted to be maintained into 2018 with growth projected to rise to 3.9%. In recent months the US economy has posted strong economic results and activity is expected to be further stimulated by a new package of tax measures. Temporary tax allowances for investment and corporate income tax reductions were approved in December 2017, and are likely to encourage investment in the economy over the short- to medium-terms. Projected growth rates for 2018 and 2019 have thus been revised upwards to 2.7% and 2.5% respectively. The Eurozone’s economy performed better than expected in 2017, recording growth of 2.4%. Both domestic and external demand increased for many States in the monetary union and drove robust economic expansions, notably in Germany, Italy and The Netherlands.
The Quarterly National Accounts for Q3 2017 showed exceptionally strong levels of growth in the Irish economy with GDP expanding by 10.4% YoY. This stronger than expected growth was affected by the presence of large multinationals in Ireland, but was also driven by a number of domestic factors. Personal consumption is an important barometer of the health of the domestic economy and showed a robust rate of growth of 2.8% YoY in Q3 2017. Goods purchases expanded at the sharpest rate with the CSO reporting that medical goods and appliances performed particularly strongly, and the latter is considered a significant development given that it underlines the willingness of consumers to undertake big ticket purchases. On a sectoral basis, the information & communication sector was the strongest performer YoY with growth of over 12% in Q3. The Manufacturing sector, which is by some distance the largest sector in the State, also recorded robust growth with a YoY expansion of close to 9%.
euro: sterling exchange rate
exchequer tax receipts performance against profile, 2017 (€million)
€1.35
€600 +6.3%
€500
€1.30 €400 €300
€1.25 Conservative Party Conference
General Election Result
€200
€1.20 €100
+0.2%
+16.4%
€-
€1.15
-9.8%
€1.10
Brexit Referendum Result
-€200
Article 50 Triggered
Jan 18
Dec 17
Oct 17
Nov 17
Sep 17
Jul 17
Aug 17
Jun 17
Apr 17
May 17
Mar 17
Jan 17
Feb 17
Dec 16
Oct 16
Nov 16
Sep 16
Jul 16
Aug 16
Jun 16
Apr 16
-€300
May 16
€1.05
-1.0%
-0.5%
-€100
-1.2% Total
Income Tax
VAT
Corporation Tax
Stamp Duties
Capital Gains
Excise Duties
source: central bank of ireland.
source: department of finance.
Consumer pressures, government spending constraints and muted investment levels continue to affect the UK economy. Growth in 2017 reached 1.7% but is projected to fall back to 1.5% in 2018 and 2019 despite global economy momentum. The Bank of England raised its interest rates for the first time in a decade in November 2017. The increase was not prompted by the traditional case of strong projected growth, but by reducing slack in the economy and above target inflation which has resulted from the depreciation of sterling.
Despite stronger than expected economic growth in the first three quarters of 2017, Exchequer tax returns for the full year were broadly in line with estimates. The greatest outperformance arose in Corporation Tax (see chart) where receipts exceeded profile by €486 million or 6.3%. Income tax surprisingly came in €236 million or 1.2% below profile, but the overall tax take was €116 million ahead of estimates and contributed to an Exchequer surplus in the year of over €1.9 billion.
major economies gdp growth forecasts
irish macroeconomic growth forecasts
global
2017 %E
2018 %f
2019 %f
3.7
3.9
3.9
uk
1.7
1.5
1.5
us
2.3
2.7
2.5
euro area
2.4
2.2
2.0
germany
2.5
2.3
2.0
japan
1.8
1.2
0.9
china
6.8
6.6
6.4
india
6.7
7.4
7.8
source: imf, january 2018.
gnp gdp private consumption public expenditure investment exports imports unemployment rate cpi inflation debt:gdp ratio* sourceS: 2017 & 2018 esri qec winter 2017. 2019: department of finance, budget 2018
2017 %E
2018 %f
2019 %f
5.4 5.0 2.8 3.5 15.9 3.1 4.7 6.2 0.6 70.1
4.2 4.2 2.9 3.6 11.9 4.4 6.8 5.4 1.4 69.0
3.0 3.2 2.2 2.0 5.6 4.3 4.9 5.5 N/A 67.1
*general government balance. source: budget 2018.
// 3
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DUBLIN ECONOMY
DUBLIN’S ECONOMY MAINTAINS MOMENTUM BUT HOUSING CHALLENGES PERSIST
unemployment continues to decline but housing supply and affordability remain problematic Dublin's labour market recorded further significant gains in Q3 2017 as the seasonally adjusted unemployment rate fell by 1.6 percentage points (pp) YoY to 6.1%. The private services sector has been vital to employment growth over the past 12 months with almost 12,000 jobs created in the sector YoY. The wholesale & retail trade and information & communication sectors have been integral to this services sector employment growth, accounting for a combined total of over 11,500 additional jobs YoY. The rising number of individuals at work in Dublin is likely to have contributed to rising housing costs as supply has not kept pace with the demands of a recovering economy. According to the RTB, average rents for residential properties in Dublin gathered further momentum in Q3 2017 to exceed â‚Ź1,500 per month for the first time since the series began in 2007. Similar increases have been recorded for property prices in Dublin with double-digit YoY price growth recorded in each month between June and October 2017. Housing completions have expanded over the past year but continued increases will be necessary to close the gap with demand. While considerable challenges exist in areas such as housing, other sectors of the Capital's economy are thriving. Tourism has provided significant impetus for growth in the Capital over the past number of years and indicators for the sector remain highly positive. Dublin Airport continues to reach new peaks in passenger arrivals with over 1.24 million people arriving in September 2017 alone, while the hotel market in Dublin has recorded rising occupancy and average daily rates on foot of robust demand. Despite robust gains across the first three quarters of 2017, Dublin's consumer sentiment index fell back in Q4 according to KBC/ESRI. Austin Hughes, Chief Economist at KBC Bank Ireland, explains:
"The pull-back in Dublin consumer sentiment in late 2017 is partly a correction of the very strong gains seen in the previous quarter. More fundamentally, it highlights the uneven nature of the current recovery and continuing uncertainties about what it might mean for consumers' own financial circumstances. Although the survey is pointing to clear improvements in areas such as new jobs in the Capital, this hasn't translated into the scale of
gains in living standards for many Dublin households that may have been expected. So, the survey suggests that while Dublin consumers remain generally positive about economic conditions in the Capital, they remain fairly cautious about what this might mean for them personally." This weakness in consumer sentiment is a factor which may act to restrict the growth of consumer spending in 2018, according to Michael McNamara Global Head of SpendingPulse, Mastercard. The new Mastercard Dublin SpendingPulse recorded a strong final quarter of 2017, and Mr Lalor commented on this:
"Retail sales finished the year on a steady footing. While Black Friday cannibalised Christmas sales, overall the last quarter of the year posted a strong growth rate. The fundamentals of the Irish economy are strong with robustness in both output and the labour market, and this will support the retail sector in 2018. However, the softness in consumer confidence and mild increases in inflation may put pressure on household discretionary spending." Dublin's IHS Markit Purchasing Managers' Index (PMI) recorded continued increases in business activity in Q4 2017. Andrew Harker, Associate Director at IHS Markit, notes:
"A strong fourth quarter completed another positive year for the Dublin private sector, with a further sharp expansion of output recorded. Firms raised activity on the back of continued inflows of new work. As workloads increased further, extra staff were again hired at a rapid pace. Further encouragement is provided by the broad-based nature of the latest improvements - manufacturing and services saw output growth accelerate, while construction again posted the fastest overall increase. While rates of expansion in Dublin were generally stronger than seen across the Rest of Ireland, increases were still marked outside the Capital. With improvements in economic conditions across the Irish economy, the stage looks set for further growth in Dublin as 2018 gets under way."
4 //
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DUBLIN ECONOMIC INDICATORS
DUBLIN ECONOMIC INDICATORS
Dublin Max 14.2%
14% 12% 10% 8% 6% 4%
Dublin
Q3 17
Q1 17
Q3 16
Q1 16
Q3 15
Q1 15
Q3 14
Q1 14
Q3 13
Q1 13
Q3 12
Q1 12
Q3 11
Q1 11
0%
Q3 10
2% Q1 10
Dublin's seasonally adjusted unemployment rate continued to decline in Q3 2017, reducing by 0.4 percentage points (pp) QoQ and 1.6pp YoY to stand at 6.1%. This was the lowest rate recorded in the Capital since mid-2008 and reflected a strengthening labour market where over 662,000 people were employed in the quarter. At the national level, the unemployment rate remained stable at 6.7% in Q3 2017 following QoQ declines in each of the previous 13 consecutive quarters.
National Max 15.9%
16%
Q3 09
source: cso lfs. dublin seasonally adjusted by EY-DKM.
18%
Q1 09
dublin unemployment (sa) year on year change % points (sa) dublin employment '000s (sa) year on year change '000s (sa)
q3 ' 17 6.1% -1.6 662.3 +5.8
dublin & national unemployment rate % (sa)
Q3 08
further steep decline in dublin's unemployment rate
National
source: cso lfs. dublin seasonally adjusted by EY-DKM. note: this series has been re-calibrated since the last issue
industrial sector weighs down rate of employment growth services employment '000s (sa) year on year change '000s (sa) industry & constr, employment '000s (sa) year on year change '000s (sa)
q3 ' 17 580.3 +12.6 76.4 -7.2
employment by broad sector '000s (sa) 700
Max: 653,500
600
500
400
source: cso lfs, seasonally adjusted by EY-DKM.
Employment levels in Dublin continued to increase YoY in Q3 2017. The private services sector recorded the strongest seasonally adjusted YoY growth of 2.9% and was supported by employment increases of 1.8% YoY in the public sector. Quite surprisingly the construction sector, which had been a key driver for the Capital's labour market, experienced a minor reduction in employment of 1.1% YoY. The greatest contraction in employment was recorded in the industrial sector where the number employed fell by 13.8% YoY, though this is likely related to recent changes in statistical methodologies.
300
200
100
0
Q3 08
Q3 09
Q3 10
Q3 11
Private Sector Services
Q3 12
Q3 13
Public Sector
Q3 14 Industry
Q3 15
Q3 16
Q3 17
Construction
source: cso lfs seasonally adjusted note: individual sector values may not sum to total due to rounding this series has been re-calibrated since the last issue
// 5
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DUBLIN ECONOMIC INDICATORS
80 70 60
Dublin
Oct 17
Feb 17
Jun 16
Oct 15
Feb 15
Jun 14
Oct 13
Feb 13
Jun 12
Oct 11
Feb 11
Jun 10
Oct 09
40
Feb 09
50
National Excl Dublin
source: cso.
residential rents € per month €1,550
Dublin Max: €1,518
€1,450 €1,350 €1,250
source: rtb.
€1,150
Average rents for residential properties in Dublin gathered pace in Q3 2017 to reach a new peak and exceed €1,500 per month for the first time since the series began in 2007. The average rent for a property in the Capital in the quarter was €1,518 per month which was €136 or 9.8% above the equivalent rent in Q3 2016. Average rents in the other counties within the GDA increased by 6.5% YoY, but a stronger growth rate of 9.2% was recorded across the rest of the country. Average rents in Dublin in Q3 were 87% higher than those recorded outside the GDA.
€1,050 €950 €850 €750
Dublin
Greater Dublin Area (ex Dublin)
Q3 17
Q1 17
Q3 16
Q1 16
Q3 15
Q1 15
Q3 14
Q1 14
Q3 13
Q1 13
Q3 12
Q1 12
€550
Q3 11
€650 Q1 11
dublin avg residential rent € per month year on year change €
q3 ' 17 1,518 +136
90
Q3 10
capital's average residential rents break €1,500 mark
110 100
Q1 10
Residential property prices in Dublin continued to increase at double digit YoY rates between August and October 2017. The index for prices in the Capital exceeded 100 in September for the first time since early 2009 as ongoing supply constraints and increased buying power affected the market. Even stronger rates of property price growth have been recorded outside Dublin over the past year, with prices increasing by close to 13% YoY in October 2017 alone.
Dublin Max 124.9
120
Jun 08
source: cso. note: this index includes both cash- and mortgage-based transactions.
130
Q3 09
property price index dublin year on year % change property price index national excl dublin year on year % change
oct ' 17 101.6 +11.6 91.0 +12.8
residential property price index (2005 = 100)
Q1 09
property prices maintain strong upward momentum
Outside GDA
source: rtb. note: gda (ex dublin) is kildare, meath and wicklow.
Completions Max: 1,750
1,600 1,400 1,200 1,000 Commencements Max: 870
800 600 400
Completions
Nov 17
Mar 17
Jul 16
Nov 15
Mar 15
Jul 14
Nov 13
Mar 13
Jul 12
Nov 11
Mar 11
0
Jul 10
200 Nov 09
An uneven trend in housing commencements has emerged in the Dublin residential market in recent months, with expansions in certain months followed by contractions in others. November 2017 is a prime example as commencements (seasonally adjusted) in the Capital increased by 16% YoY but fell by 15% MoM. Completions have shown a more consistent upward trend, rising by 52% YoY and close to 8% MoM to stand at 620 in November, and will be expected to increase further over the coming months.
1,800
Mar 09
source: dhplg. seasonally adjusted by EY-DKM.
2,000
Jul 08
total house commencements (sa) year on year change total house completions (sa) year on year change
nov ' 17 578 +81 620 +211
dublin housing commencements & completions (sa)
Nov 07
housing completions expand, but commencements inconsistent
Commencements
source: dhplg. seasonally adjusted by EY-DKM. note: Note: Completions data has been adjusted to accommodate a 2014 change in the method of data collection
6 //
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DUBLIN ECONOMIC INDICATORS
130
100 90 80
Following a period of relative stability, office rents returned to strong levels of growth across Dublin in Q4 2017. In the city centre, rents rose by 8.5% YoY to reach a new peak of over 118 on the index. The south suburbs recorded a less significant increase in rents of 3.6% YoY but also reached a new peak of 114 on the index. This was the first change in office rents recorded in the south suburbs in almost three years. Rents in the north and west suburbs are generally lower in absolute terms, but also recorded considerable levels of growth in Q4.
70
vacancy rate % dublin 2/4 year on year change % points vacancy rate % dublin suburbs year on year change % points
South Suburbs Max = 114
110
source: CBRE
marginal decline in office vacancy rates in q4 2017
City Centre Max = 118.2
120
60
City Centre
Q4 17
Q2 17
Q4 16
Q2 16
Q4 15
Q2 15
Q4 14
Q2 14
Q4 13
Q2 13
Q4 12
Q2 12
Q4 11
Q2 11
Q4 10
Q2 10
Q4 09
Q2 09
40
Q4 08
50
Q2 08
city centre office rent index year on year % change south suburbS office rent index year on year % change
q4 '17 118.2 +8.5 114.0 +3.6
dublin office rents index (2006 = 100)
Q4 07
office rents increase across dublin in q4 2017
South Suburbs
source: cbre.
dublin office space vacancy rates % 30%
q4 '17 5.7 +1.0 7.6 -2.2
Dublin Suburbs Max = 25% Dublin 2/4 Max = 20.6%
25% 20% 15%
source: cbre.
10%
exceptionally strong growth in public transport usage public transport million trips (sa) year on year change million trips (sa)
q3 '17 54.8 +5.0
Dublin 2/4
Q4 17
Q2 17
Q4 16
Q2 16
Q4 15
Q2 15
Q4 14
Q2 14
Q4 13
Q2 13
Q4 12
Q2 12
Q4 11
Q2 11
Q4 10
Q2 10
Q4 09
0%
Q2 09
5%
Q4 08
Dublin's overall office vacancy rate fell marginally from 6.2% in Q3 2017 to 6.1% in Q4. In the Dublin 2/4 postcodes, the vacancy rate was broadly stable QoQ but increased by 1 percentage point (pp) YoY from a low base to stand at 5.7%. Computers, hi-tech and business service providers accounted for the majority of take up in the two postcodes in the quarter. In the suburbs, vacancy rates continued on a downward trajectory in Q4 to stand at 7.6%, 2.2pp below the same quarter in 2016.
Dublin Suburbs
source: cbre.
public transport million trips (sa) 56 54 52
source: nta seasonally adjusted by EY-DKM.
50 48 46
Q3 17
Q1 17
Q3 16
Q1 16
Q3 15
Q1 15
Q3 14
Q1 14
Q3 13
Q1 13
Q3 12
Q1 12
Q3 11
42
Q1 11
44
Q3 10
Passenger trips on the four services which make up Dublin's public transport system expanded rapidly in Q3 2017. Just under 55 million trips (seasonally adjusted) were undertaken in the quarter and this represented exceptionally strong growth of 10.1% YoY and 5% QoQ. Public transport usage has now increased YoY in every quarter for four years, with the most recent expansions primarily accounted for by the largest service provider, Dublin Bus.
source: nta. seasonally adjusted by EY-DKM. note: data includes dublin bus, bus eireann, luas & irish rail.
// 7
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DUBLIN ECONOMIC INDICATORS passenger arrivals at dublin airport continue to reach new peaks sep '17 1,240.7 +74.6
source: cso, seasonally adjusted by EY-DKM.
1,250
Max: 1,241
1,150 1,050 950
record throughput at dublin port in 2017
850 750 Severe Winter Weather
650
Sep 17
Nov 16
Jan 16
Mar 15
May 14
Jul 13
Sep 12
Nov 11
Jan 11
550
Mar 10
Icelandic Ash Cloud
May 09
Passenger arrivals at Dublin Airport maintained an upward trajectory in the third quarter of 2017 to reach a new peak of 1.24 million (seasonally adjusted) in September. Growth exceeded 6% YoY for a fourth consecutive month with passenger journeys increasing sharply on North American, Middle Eastern and North African routes in particular. This strong performance can be expected to have been sustained through the final quarter of the year with the airport reporting that each of the months of October, November and December were the strongest on record.
Jul 08
total arrivals '000s (SA) year on year change '000s (sa)
dublin airport arrivals '000s (sa)
source: cso. seasonally adjusted by EY-DKM.
dublin port tonnage million tonnes (sa) 9.5 Max: 9.3 million tonnes
hotel rates close to peak levels but new supply due on stream hotel occupancy rate % (sa) year on year change %age point index of hotel room supply (sa, 2011=100) year on year change %
dec ' 17 83.5% +1.2 98.4 0.0%
8.0 7.5 7.0 6.5
Min: 6.4 million tonnes
Q4 17
Q2 17
Q4 16
Q2 16
Q4 15
Q2 15
Q4 14
Q2 14
Q4 13
Q2 13
Q4 12
Q2 12
Q4 11
Q2 11
Q4 10
5.5
Q2 10
6.0
Q4 09
Following a peak in Q3 2017, the total cargo handled at Dublin Port remained broadly stable in the final quarter of the year. Over 9.2 million tonnes of cargo (seasonally adjusted) were handled in Q4. This represented a YoY increase of just under 400,000 tonnes or 4.1%. The Port reported record results for the full year of 2017, with the total cargo handled increasing by close to 1.5 million tonnes or 4.3%. Imports and exports both contributed substantially to this growth.
8.5
Q2 09
Source: Dublin Port. Seasonally Adjusted by EY-DKM. Note: imports and exports may not add to total throughput due to seasonal adjustment and rounding.
9.0
Q4 08
dublin port exports million tonnes (sa) yoy change million tonnes (sa) dublin port imports million tonnes (sa) yoy change million tonnes (sa)
q4 ' 17 3.56 -0.10 5.36 0.09
source: dublin port. seasonally adjusted by EY-DKM.
dublin hotel average daily rates (sa) €150 €140
Maximum: €137
€130 €120
source: str. seasonally adjusted by EY-DKM.
€110
Dec 17
Oct 17
Aug 17
Jun 17
Apr 17
Feb 17
Oct 16
Dec 16
Aug 16
Apr 16
Jun 16
Feb 16
Oct 15
Dec 15
Jun 15
Aug 15
Apr 15
€90
Feb 15
€100
Dec 14
Occupancy rates in Dublin hotels remained stable at close to 83.5% (seasonally adjusted) across Q4 2017. This was marginally below the peak recorded in late 2015 and reflected a combination of soaring demand and weak supply in recent years. Supply was largely unchanged in Q4, but STR has reported that the rate of construction of hotel rooms relative to the size of the market in the Capital is the strongest in Europe at present. Average Daily Rates for rooms in Dublin were close to peak levels at over €136 at the end of 2017, representing a YoY increase of close to 4%.
source: str. seasonally adjusted by EY-DKM.
8 //
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F E B R UA RY 2 0 1 8
DUBLIN Mastercard SpendingPulse
TM
Dublin Mastercard SpendingPulse Delivering Unique Insights for Consumer and Tourism Spend.
KEY HIGHLIGHTS YEAR-ON-YEAR Q4 2017*
+6.1%
+5.9%
OVERALL SALES
+5.3% NECESSITIES
OVERSEAS TOURISM SPEND
+3.9% DISCRETIONARY
+7.7% HOUSEHOLD GOODS
+17.6%
-0.8% ENTERTAINMENT
*RETAIL SALES VALUE (SA)
ECOMMERCE
2096_SpendingPulse_v4.indd 1
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TM
DUBLIN Mastercard SpendingPulse
| February 2018
TOTAL RETAIL SPEND IN DUBLIN GATHERS PACE IN Q4 TOTAL RETAIL SALES INDEX (SA) 120
116
115
114
110 105
DUBLIN
Q4 17
Q3 17
Q2 17
Q1 17
Q4 16
Q3 16
Q2 16
Q1 16
Q4 15
Q3 15
Q2 15
Q1 15
Q4 14
Q3 14
Q2 14
95
Q1 14
100
IRELAND
Overall sales increased by 2.1% QoQ and 6.1% YoY as the sales index for the Capital reached 115.8 (2014 = 100). Retail sales has now increased QoQ in all bar two of the past 15 quarters. and this is likely a reflection of the improving economic and labour market conditions in Dublin.
Retail sales finished the year on a steady footing. While Black Friday cannibalised Christmas sales, overall the last quarter of the year posted a strong growth rate. The fundamentals of the Irish economy are strong with robustness in both output and labour market, and this will support the retail sector in 2018.
The Sales index for Ireland as whole also maintained an upward trajectory in Q4 2017, but growth was marginally more subdued at 1% QoQ and 4.2% YoY. This would suggest that expenditure growth in Dublin was considerably stronger than across the rest of Ireland in the quarter. Nonetheless total Irish retail spending has increased on a consistent basis over the past four years, with QoQ growth recorded in every quarter since the series began in 2014.
Michael McNamara
GLOBAL HEAD OF SPENDING PULSE, MASTERCARD
DUBLIN RETAIL SALES VALUE INDEX (SA)
+6.1%
116
+2.1%
YOY GROWTH DUBLIN RETAIL
DUBLIN RETAIL INDEX VALUE
QOQ GROWTH IN DUBLIN SALES INDEX
Q4 2017
Q1 2014 = 100
QOQ
METHODOLOGY A macro-economic indicator, SpendingPulse™ reports on national and Dublin retail sales and is based on aggregate sales activity in the Mastercard payments network, coupled with estimates for all other payment forms, including cash and cheque. This information has been grossed up to present an estimate of the total retail sales of retail businesses in Ireland and Dublin to both residents and tourists. Data is seasonally adjusted but is not adjusted for inflation. Mastercard SpendingPulse™ does not represent Mastercard financial performance. SpendingPulse™ is provided by Mastercard Advisors, the professional services arm of Mastercard International Incorporated. See www.dublineconomy.ie for more info on methodology.
2
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TM
DUBLIN Mastercard SpendingPulse
SPENDINGPULSE: SELECTED SUB- SECTORS
METHOD: ECOMMERCE
166
165
The YoY expansion in Dublin Retail Sales over Q4 2017 was positively influenced by expenditure growth in three of the four main sectors of the Dublin economy covered in the Mastercard SpendingPulse. Robust YoY growth also occurred across the categories of necessities, discretionary and household goods. The increase in household goods expenditure is particularly noteworthy as it signals a confidence and willingness amongst Dublin consumers to spend on big ticket items. Entertainment was the sole category to record a YoY decline. Spending in the sector dipped by 1.2% QoQ and 0.8% YoY and continues a trend of slowing growth in spending in the sector over the past two years.
155 145
148
125 115 105
Q3 17
Q2 17
Q1 17
Q4 16
Q3 16
Q4 17
eCommerce spending continued to increase at the strongest rate with an expansion of over 17% YoY in the quarter. The sector has recorded an aggregate increase in spending by Dublin consumers of over 66% since the series began in 2014.
DUBLIN
Non store Retailers including Electronic Shopping and Mail-Order Houses, Direct Selling Establishments.
RETAIL CATEGORY: DISCRETIONARY 120
RETAIL CATEGORY: NECESSITIES 120
116
115
115
115
114
110
IRELAND
DUBLIN
IRELAND
Discretionary Retail: Department Stores and Clothing Stores.
Q1 17
Q4 16
Q3 16
Q2 16
Q1 16
Q4 15
Q3 15
Q2 15
Q1 15
Q4 14
Q3 14
111
Q1 14
Q4 17
Q3 17
Q2 17
Q1 17
Q4 16
Q3 16
Q2 16
Q1 16
Q4 15
Q3 15
Q2 15
95 Q1 15
95 Q4 14
100
Q3 14
100
Q2 14
105
Q1 14
105
Q2 14
110
Q4 17
IRELAND
Q2 16
Q1 16
Q4 15
Q3 15
Q2 15
Q1 15
Q4 14
Q3 14
Q2 14
Q1 14
95
Q3 17
135
Q2 17
175
| February 2018
DUBLIN
Grocery: all food and beverage stores.
RETAIL CATEGORY: ENTERTAINMENT
RETAIL CATEGORY: HOUSEHOLD GOODS
128
135
140
145 140
130
135
125
130
120
124
115
134
125 120 115
110
110
105
105
100
100
IRELAND
DUBLIN
IRELAND
Hotels, restaurants and bars.
Q4 17
Q3 17
Q2 17
Q1 17
Q4 16
Q3 16
Q2 16
Q1 16
Q4 15
Q3 15
Q2 15
Q1 15
Q4 14
Q3 14
Q2 14
Q1 14
Q4 17
Q3 17
Q2 17
Q1 17
Q4 16
Q3 16
Q2 16
Q1 16
Q4 15
Q3 15
Q2 15
Q1 15
Q4 14
Q3 14
Q2 14
95 Q1 14
95
DUBLIN
Household furniture, electronics and hardware.
3
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TM
DUBLIN Mastercard SpendingPulse
| February 2018
TOURISM RETAIL SPEND INDEX: STRONG PERFORMANCE OVER 2017 DRIVEN BY GROWTH IN US TOURISM SPEND Retail spending by tourists in Dublin grew by close to 6% YoY in Q4 2017. This increase was primarily driven by the US market where expenditure rose by 4.6% QoQ and 16% YoY. The US market is of vital importance to the Dublin tourist economy, and this was underlined in Q4 2017 by declining expenditure levels YoY in the UK, French, German and Chinese feeder markets. In relative terms, the decline in spending was most pronounced in the Chinese market where spending dipped by 14.3% YoY.
Trends in tourism spending were slightly different at the national level in Q4 2017, with total expenditure increasing at a more robust rate of 8.8% YoY. The US market was also pivotal with growth of 17.5% YoY, while increased expenditure was also recorded from the German and Chinese markets. Spending by UK tourists across the country fell, but at a rate of 1.4% YoY which was slower than the decline seen in Dublin. This has been a consistent trend in recent quarters, and suggests that city breaks to Dublin may have suffered more adverse effects from the weakening in the UK market relative to the rest of the Irish tourism market.
This was the sixth consecutive quarter in which spending fell YoY amongst Chinese visitors. The UK market, which accounts for a large proportion of visitors to the Capital, also recorded a substantial decline in expenditure of 7% YoY. This may be a reflection of the ongoing economic uncertainty in the UK coupled with the depreciation of sterling, which will have made trips to Ireland relatively more expensive in recent times.
Fáilte Ireland estimates that the US market was the largest source of tourism revenue for Ireland in 2016 (latest available) as it accounted for spending of €1.17bn, arising from 1.29m tourist visits to the country. The UK (excluding Northern Ireland) was the second largest market at €1.11bn (3.6m tourists)
DUBLIN AND IRELAND TOURIST SPEND BY ORIGIN - Q4 2017 (SA)
-1%
YOY CHANGE IN SPENDING IN IRELAND
-7%
+18% +16%
YOY CHANGE IN SPENDING IN DUBLIN
-7%
-2%
YOY CHANGE IN SPENDING IN DUBLIN
YOY CHANGE IN SPENDING IN IRELAND
+0.5% -14%
YOY CHANGE IN SPENDING IN DUBLIN
YOY CHANGE IN SPENDING IN IRELAND
-3%
+2%
YOY CHANGE IN SPENDING IN DUBLIN
YOY CHANGE IN SPENDING IN IRELAND
YOY CHANGE IN SPENDING IN DUBLIN
YOY CHANGE IN SPENDING IN IRELAND
IRELAND
IRELAND TOURISM SPEND VALUE INDEX (SA)
DUBLIN TOURISM SPEND VALUE INDEX (SA)
Q1 2014 = 100
220
Q1 2014 = 100
210
210
200
200
190
190
180
180
170
170
150.7
160
DUBLIN
150.5
160 150
150
140
140 130
130
120
120
110
110
100 All
UK
USA
Germany
France
100
China
All
UK
USA
Germany
France
Q1 2017
Q2 2017
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q3 2017
Q4 2017
China
4
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DUBLIN’S INTERNATIONAL RANKINGS
DUBLIN’S INTERNATIONAL REPUTATION REMAINS STRONG DESPITE COST OF LIVING FACTORS Internationally published benchmarks are a useful means of measuring a city’s performance relative to its peers, and recent indicators for Dublin confirm the city’s strong showing across a range of dimensions (see table below). The benchmarks listed focus on a number of areas – attractiveness for FDI, the real estate market, quality and cost of living, business environment, university quality, start-up environment and tourism. At the national level, Ireland was ranked as the 6th most competitive country in the world in 2017 by the Swiss business school, IMD. This was the country’s highest ranking since 2000 and reflected strong labour productivity, national culture, flexibility and adaptability. Ireland also rated highly for attracting and retaining talent, its attitudes towards globalisation and the country’s investment incentives. Dublin was ranked in 7th position out of 31 European cities for real estate investment by PwC/ULI in 2017, down three places on 2016. The rankings stated that:
“Dublin is settling into a new phase as a normalised, mature and safe market to invest in after years as an opportunistic investing story [...] The make-up of buyers is changing accordingly - less US private equity capital and much more institutional money, largely from Europe”. The PwC/ULI report also highlighted that the Capital was universally recognised as a city likely to benefit from Brexit given that its skilled, English-speaking workforce will be attractive to international firms. The anticipated inward movement of firms is expected to add a number of years of demand to Dublin’s commercial property market. Dublin’s labour force was central to its ranking of 5th out of 20 European cities in a Colliers International Cities of Influence report, with the orientation of its economy and the skills, experience and English language proficiency of its workforce to the fore. The workforce will also have benefitted from changes in talent migration which, according to LinkedIn, have recently
shown more professionals moving to the country than departing with net migration particularly strong from the UK. In tourism, Dublin was listed as one of 21 cities on the National Geographic Traveller’s magazine '2018 Best of the World' destinations with the city described as "Europe’s largest village". The city’s reputation as a business destination will also have been enhanced by the Convention Centre Dublin being named the world’s leading meetings and conference centre at the World Travel Awards in 2017. Despite strong performances in a number of rankings, Dublin was placed at 47th out of 51 global cities in the Expat City Ranking 2017. This low ranking was largely due to the accommodation situation in the city with almost nine out of 10 expats reporting that housing was unaffordable. In a related context almost half of expats reported that their financial circumstances were challenging in Dublin due to a high cost of living, though career opportunities and a welcoming populace were cited as important positive factors in the city.
d u b l i n ' s l at e s t i n t e r n at i o n a l r a n k i n g s SOURCE
BENCHMARK CRITERIA
YEAR
RANKING
CHANGE‡
FDI Intelligence Global Cities of the Future
Socio-economic
2017
3
-
Global Financial Centres Index (GFCI)
Business environment, financial sector development, infrastructure, human capital, reputational & general factors; online survey
2018
30
▲
Knight Frank Global Cities Report
Cost to businesses of employing 100 people
2018
13
PwC/ULI Emerging Trends in Real Estate Europe
Real estate investment, development
2018
7
Knight Frank Global Residential Cities Index
House price growth
2017
36
IMD World Competitiveness Yearbook Rankings (Ireland)
Economic performance, government efficiency, business efficiency & infrastructure
2017
6
Mercer 2017 Cost of Living Survey
Cost of consumer goods and services
2017
66
Mercer 2017 Quality of Living Survey
Environmental/socio-economic
2017
34
QS World University Rankings
University quality
2018
88*
2017
48*
▼ ▼ ▲ ▲ ▼ ▲ -
2016
6
-
2017
47
-
2017
5
-
PitchBook Top Universities for Venture Capital-backed Origin of companies which received a first entrepreneurs round of venture capital Tech clusters’ employment, growth and CBRE European Tech Ranking attractiveness credentials Quality of urban living, getting settled, urban InterNations Expat City Ranking 2017 work life, and finance & housing. Economic size & orientation, talent pools, Colliers International Cities of Influence affordability and country risk. * tcd. ‡change on previous publication of the relevant benchmark. an upward-pointing arrow denotes an improvement.
// 9
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KBC / ESRI CONSUMER SENTIMENT INDEX
Q4 17
Q2 17
Q4 16
Q2 16
Q4 15
Q2 15
Q4 14
Q2 14
Q4 13
Q2 13
Q4 12
Q4 11
Q2 12
Q2 11
Dublin
National excl. dublin
120
116.0 +11.6 -5.1
127.0 +5.7 +2.5
110
National excl. Dublin
Base 2003 = 100
100 90 80 70 60
Dublin
Q4 17
Q2 17
Q4 16
Q2 16
Q4 15
Q2 15
Q4 14
Q2 14
Q4 13
Q2 13
Q4 12
Q2 12
Q4 11
Q2 11
Q4 10
Q2 10
40
Q4 09
50
National excl. Dublin
Dublin expectationS 230
National
dublin excl. dublin 193.7 +19.6 -6.8
Q4 10
40
dublin
consumer expectations weaken q4 2017 year on year change quarter on quarter change
60
130
The Dublin Index of Current Conditions fell by 5.1 index points QoQ in Q4 2017, thus expanding the differential between the indices for Dublin and the rest of Ireland. The main driver was a weakening purchasing climate (-7.7 index points QoQ), with consumers less inclined to make large household purchases. Less significant household purchases and self-perceived personal financial situations improved QoQ with increases of 11.4 and 12.1 index points respectively.
consumer expectations
80
Q2 09
q4 2017 year on year change quarter on quarter change
100
Dublin current conditions
perceptions of current conditions decline in q4 2017 current conditions
120
Q2 10
Following a major decline in late 2016, consumer sentiment in Dublin rebounded in 2017. Sentiment levels in the Dublin region generally converged closer to those recorded in the rest of Ireland in the year. On a YoY basis, Dublin ended 2017 with a strong 15.5 index point rise in Q4. However, the quarter also saw the index falter slightly, decreasing by 5.9 index points QoQ. This fall reflects a minor reversal in positive attitudes towards current and expected personal financial situations, as well as lower confidence with respect to making major household purchases.
140
Q4 09
160.1 +8.6 +1.1
Q2 09
153.2 +15.5 -5.9
160
Q4 08
National excl. dublin
Q4 08
q4 2017 year on year change quarter on quarter change
dublin
180
Q2 08
consumer sentiment
Dublin sentiment overall Base 2003 = 100
Q2 08
2017 consumer sentiment recovers from 2016 tumble
191.4 +11.4 -0.1
Base 2003 = 100
210 190 170 150 130 110 90 70
Dublin
Q4 17
Q2 17
Q4 16
Q2 16
Q4 15
Q2 15
Q4 14
Q2 14
Q4 13
Q2 13
Q4 12
Q2 12
Q4 11
Q2 11
Q4 10
Q2 10
Q4 09
Q2 09
30
Q4 08
50 Q2 08
There was a considerable weakening of consumers’ views on the Irish economy in Q4 2017 (-6.8 index points QoQ), thus reversing the majority of gains made in the previous quarter. Recent uncertainties regarding Brexit negotiations are likely to have affected consumers' views relative to Q3. Outside Dublin, overall expectations remained stable, with consumers marginally more positive about their future personal finances, up 1.1 index points compared to Dublin’s quarterly fall of 5.3 points.
National excl. Dublin
About
The KBC/ESRI sentiment index is based on responses from consumers about general economic conditions and their household finances. A more detailed commentary is available at www.kbc.ie/blog 10 //
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DUBLIN IHS MARKIT PMI growth of output in dublin accelerates in q4 2017 overall ihs markit pmi
dublin
overall ihs markit pmi (sa)
national excl. dublin
60
q4 2017
58.9
56.8
55
year on year change
-0.9 +1.0
+0.8 -1.5
50
quarter on quarter change
increasing rate of growth ▲
50 = no change
65
45 40 35 30
Dublin
65
national excl. dublin
60
q4 2017
58.6
57.2
55
year on year change
+1.2 -0.3
+0.9 -1.2
Q4 17
Q4 16
Q4 15
30
Q4 17
Q4 16
Q4 15
Q4 14
Q4 13
Q4 12
Q4 11
Q4 10
Q4 09
Q4 08
Q4 07
Q4 06
Q4 05
increasing rate of contraction ▼ Q4 04
25
National excl. Dublin
overall pmi employment growth (sa) 65
national excl. dublin
60
q4 2017
56.8
54.2
55
year on year change
+2.6 -2.1
-3.3 -1.2
50 45 40 35 30
Dublin
Q4 17
Q4 16
Q4 15
Q4 14
Q4 13
Q4 12
Q4 11
Q4 10
Q4 09
Q4 08
Q4 07
Q4 06
Q4 05
Q4 04
increasing rate of contraction ▼ Q4 03
25
Q4 02
Dublin firms increased employment for the twenty-first quarter in a row in Q4 2017 in response to continued improvements in workloads. Staffing levels rose markedly in the Capital at the end of the year, albeit to a lesser extent than was seen in Q3. Job creation in Dublin outpaced the Rest of Ireland for the second successive quarter, but companies based outside Dublin still posted a solid increase in employment in Q4.
increasing rate of growth ▲
50 = no change
Q4 01
quarter on quarter change
Q4 14
35
dublin
employment growth
Q4 13
40
Dublin
employment continues to rise sharply
Q4 12
45
Q4 03
New orders continued to rise strongly in Dublin at the end of 2017, extending the current sequence of growth to 21 quarters. The rate of expansion was broadly unchanged for the second quarter running, remaining at a marked pace that was well above the series average. Growth among Dublin firms was again faster than in the Rest of Ireland, the seventh consecutive quarter in which this has been the case.
increasing rate of growth ▲
50
Q4 02
quarter on quarter change
Q4 11
overall pmi new orders (sa)
dublin
new orders
National excl. Dublin
50 = no change
Q4 01
new orders in dublin rise faster than in rest of ireland
Q4 10
Q4 09
Q4 08
Q4 07
Q4 06
Q4 05
Q4 04
Q4 03
increasing rate of contraction ▼ Q4 02
25
Q4 01
Dublin private sector output increased at a sharp and accelerated pace in the final quarter of 2017, completing another strong year for the local economy. The Dublin PMI rose to 58.9 in Q4 from 57.9 in Q3. The rise in activity in the Capital was faster than in the Rest of Ireland. Expansions were recorded across all three monitored sectors, led by construction. Both the manufacturing and services sectors posted faster increases than in the previous quarter.
National excl. Dublin
about
The Dublin Purchasing Managers’ Index® (PMI) series is produced by IHS Markit Economics, an independent research company that produces highly-regarded surveys of business conditions in nations around the world www.markit.com // 11
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SPECIAL REPORT
HOW SMART CITY TECHNOLOGIES ARE SUPPORTING DUBLIN’S COMPETITIVENESS BY JAMIE CUDDEN SMART CITY PROGRAMME MANAGER, DUBLIN CITY COUNCIL
Smart Dublin is an initiative of the four Dublin local authorities to engage with smart technology providers, researchers and citizens to solve city challenges and improve city life. Cities and governments around the world are aspiring to be ‘Smart’. While there is no clear definition of a smart city there are some common threads including a focus on the increased use of sensors and instruments that allow cities to be better monitored and managed in real time. A smart city is also considered as one whose economy is increasingly driven by technology inspired innovation and entrepreneurship that in turn will attract businesses and jobs, create efficiencies and raise the productivity and competitiveness of the public and private sectors. Smart cities also involve increased collaboration and engagement between the city authority, the academic and business sectors and, most importantly, citizens. The creation of a Smart Dublin regional structure in 2016 was initiated to ensure that Dublin can take full advantage of some of the big tech trends that are transforming how we live and work. These trends include Mobile, Cloud Computing, the Internet of Things (IOT), Big Data, Machine Learning and Artificial Intelligence. One of the main ideas is to turn our city challenges into opportunities for innovation, addressing areas such as traffic congestion and mobility, how we respond to extreme weather events, improving energy efficiency and environment performance for example. At the centre of this is also how we improve citizen engagement and drive more efficient service delivery.
Creating new opportunities for start-ups and entrepreneurs Smart Dublin and Enterprise Ireland are collaborating in supporting entrepreneurs to solve city challenges and are delivering one of the largest smart city innovation programmes globally. This programme is being delivered through Enterprise Ireland’s Small Business Innovation Research programme (SBIR). Over 2016 and 2017 we have launched four challenges with over €1 million funding committed to source solutions to help scale up cycling, address illegal dumping and better monitor flooding risk across Dublin. To date 23 companies have benefitted from funding of between €12,500 and €25,000 each as well as working alongside local authority teams to design and pilot their solutions across Dublin. We are supporting companies to build new products and services pushing the realms of innovation and generating new job opportunities.
accelerating dublin's smart city ambition Dublin is making real progress on its Smart City journey. We have all the key ingredients in place to realise our potential – world leading tech companies, a vibrant 'start up' ecosystem, universities and a proactive city. However a real challenge is ensuring that we can keep up with the pace of technology innovation with relevant and appropriate policies, supports and regulation.
12 //
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examples of how dublin is getting smarter A game changer was the delivery of real time passenger information (RTPI) for Dublin’s public transport system, in particular on the capital’s extensive bus network – with this information now available on signage and also as a real-time data feed to your smartphone.
Dublin's Traffic Management Centre with its intelligent transport systems, adaptive traffic signalling, and public transport prioritisation as well as an extensive CCTV network (with over 200 networked cameras) helps to keep traffic moving across the city.
dublindashboard.ie created by Maynooth University is one of the most comprehensive city dashboards providing access to thousands of interactive data visualisations. Phase two of the dashboard is underway and is supported through a €2 million research grant from Science Foundation Ireland.
Croke Park (one of the largest stadiums in Europe) is one of the world's first carbon neutral stadiums and now the test bed for a suite of cutting edge Internet of Things (IoT) technologies working with companies such as Intel and Microsoft.
In order to respond more effectively to flooding we now have a network of sensors monitoring river levels, rainfall and local weather conditions in real time. The city is collaborating with Intel and the CONNECT Research Centre for Future Networks in TCD to deploy experimental low cost rainfall sensors.
Over 400 smart bins (Big Belly compactors) were deployed across Dún Laoghaire-Rathdown resulting in a significant increase in efficiencies. These bins not only collect and compact waste with real time monitoring, but also measure environmental variables and passing pedestrian numbers.
// 13
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SPECIAL REPORT
Dublin's hotel performance to remain strong through 2018 BY SARAH DUIGNAN DIRECTOR OF CLIENT RELATIONSHIPS, STR
Over the course of 2017, Ireland’s hotels performed really well with a 1.8% increase in occupancy to 78.3%, and a 6.6% increase in the Average Daily Rate (ADR) to €125.95.
“
Regional Ireland (Ireland excluding Dublin) was the main driver of Ireland’s overall occupancy performance this year, representing a strong pick up in performance, eclipsing Dublin’s moderate occupancy growth”
irish hotel markets - occupancy, annual daily rate (adr), revenue per available room (revpar)
€0
ADR
RevPAR
Dublin City Centre
€20
40%
Dublin Surroundings
€40
45% North West Ireland
€60
50%
Munster Regional
€80
55%
Leinster Regional
€100
60%
Kilkenny
€120
65%
Kerry
€140
70%
Cork
€160
75%
Ireland Regional
€180
80%
Dublin
85%
Ireland
In Dublin, occupancy growth was marginal, up 0.8%, but nevertheless the city maintains one of the highest actual occupancy levels among key European cities at 83%. ADR growth has been the main driver of performance in Dublin, up 6.9% to €136.80. While Dublin’s rate growth was a major story for 2017, it is still far from being one of Europe’s most expensive hotel markets. To provide some context, London’s ADR over 2017 was €169.93, Barcelona’s €143.32, and Amsterdam’s was €143.91– to name but a few. Regional Ireland (Ireland excluding Dublin) was the main driver of Ireland’s overall occupancy performance this year, representing a strong pick up in performance, eclipsing Dublin’s moderate occupancy growth. In terms of RevPAR (Revenue per available room) performance North-West Ireland experienced an 8% increase while Munster grew 11.9% for example. This compares to Dublin’s 7.7% growth. The biggest challenge facing the Irish hotel market in the short term is Brexit uncertainty. UK tourism demand may weaken further as the British consumer faces higher inflation and economic uncertainties in 2018. Recent data from Mastercard’s
Occupancy
SpendingPulse shows that overseas tourist spend for Ireland was up 8.8% YoY in Q4 2017. The leading growth area was US tourists with overall spend up 17.5% YoY, while UK spend was down 1.4% YoY. STR and forecast partner Tourism Economics predict that arrivals from the US should grow by 4.5% per year on average through 2021, with increases in arrivals also forecasted from other top source markets for Ireland, including Germany (+3.4% per year through 2021), and France (+3.3% per year through 2021).
Looking ahead STR projects an ADR growth between 5.5% and 7.5% in Dublin for 2018. Occupancy is expected to increase by between 0.5% and 1.5%, coming in at an actual level between 82% and 84%. As a result, RevPAR growth should be somewhere between 3.0% and 5.2%, ensuring another strong performance for 2018.
14 //
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ECONOMIC SCORECARD
dublin: economic scorecard february 2018 Note: These "petrol gauge" charts present the performance of the particular indicator relative to a range of performances from most positive (green) to least positive (red). Each gauge presents the latest value compared to the peak value and the trough value over the last decade (except for public transport trips which cover the past five years). The Commercial Property gauges are red at the high and low extremes, in recognition of the undesirability of rents that are either too high or too low as well as vacancy rates.
economy ihs markit business pmi q4 2017
46
51
8
40
57
58.9
34
unemployment rate q3 2017
100
10
7.0
63
kbc/esri consumer sentiment q4 2017
70
11
6.1
5
3 month moving average (sa)
120
13
153
53
% (sa)
140
160
index (2003 = 100) (sa)
transport airport arrivals sept 2017
870
990
740
7.6 1,120
1,241
615
seaport cargo q4 2017
1,245
000's/month (sa)
public transport trips q3 2017
8.1
7.0
8.7
9.3
6.4
50.2
47.9
9.3
million tonnes/quarter (sa)
45.5
43.2
52.6
54.8
million trips/quarter (sa)
residential property average residential rents q3 2017
1,200
1,300
1,090
981
residential property price index oct 2017
1,518
1,520
70
118
101
55
â‚Ź/month
1,100
700
102
86 1,410
housing completions nov 2017
134
index 2005 = 100
400
1,400
620
61
1,750
units/month (sa)
commercial property dublin city centre office rent q4 2017
460
540
380
296
dublin 2/4 office vacancy rate q4 2017
700 â‚Ź/sq.m.
700
10
5
25
5.7 %
18
15
20
15 620
dublin suburbs office vacancy rate q4 2017
30
11
22
7.6
25
%
sources: cso, except consumer sentiment kbc/esri; ihs markit; seaport cargo dublin port; public transport nta; residential rents rtb; commercial property cbre research
// 15
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OPEN, CONNECTED & ENGAGED
Finalist of the World Smart Cities Awards 2017
Dublin Economic Monitor - JAN 2018.indd 16
www.SmartDublin.ie
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