Dublin Business Activity Remains Stable in Q4 2022

Dublin firms are feeling the pinch as waning demand acts to limit business activity both in the Capital and across the Rest of Ireland. Growth in the service sector was cancelled out by falling activity across manufacturing and construction in Q4. On a more positive note, firms are still taking on extra staff, perhaps hoping that any soft-patch will be short-lived.

Activity levels amongst Dublin businesses remained stable in Q4 2022, in spite of the significant challenges which the domestic and international economies are facing – most notably in the form of inflation. A PMI reading of 49.9 was recorded in Dublin in Q4, thus marginally falling below the 50 mark which separates contraction from growth. The Q4 reading ended a sequence of six successive quarters of expanding business activity in the Capital.

The final quarter of 2022 was mixed for the three main sectors in Dublin. The services sector recorded another solid increase in activity with a PMI reading of 52.7. This represented a minor strengthening (+0.2 index points) relative to the previous quarter, but contrasted significantly with the manufacturing and construction sectors where readings of 47.2 and 45.1 each signified a second consecutive quarter of contraction. A similar picture emerged across the Rest of Ireland where the services sector expanded (54.0) but the manufacturing (49.8) and construction sectors (47.7) contracted.

New orders also fell in Dublin in Q4, the first such reduction since early 2021. A reading of 48.1 was broadly aligned with the Rest of Ireland (49.2) and points to weaker new project pipelines for businesses. The surge in new orders in the immediate post-pandemic era of early 2022 hence appears to have been short-lived.

In more encouraging developments, businesses in Dublin and across the country continued to create jobs in Q4. Employment levels in the Capital rose for an eighth consecutive quarter with a PMI reading of 52.3. This was marginally stronger than the rest of Ireland (51.5), and underlines ongoing resilience within the labour market.