Dublin Business Activity Returns to Growth in Q1

Following a slight slowdown at the end of 2022, the Dublin private sector soared straight back into expansion territory in Q1 2023 and registered marked uplifts in all of the three areas of activity, new orders and employment. The wider upturn was buoyed by sharp growth in the services and construction sectors, though conditions were less favourable in the manufacturing economy.

The Dublin Purchasing Managers’ Index (PMI), which tracks business activity in the Capital, soared back into expansion territory in the first quarter of 2023. A PMI reading of 55.5 was recorded in the quarter, substantially exceeding the 50 mark which separates growth from contraction. The rate of expansion was the strongest since Q2 2022, and followed a minor contraction at the tail end of last year.

Growth was stronger in Dublin than the Rest of Ireland (52.6) in the quarter. The swifter pace of expansion in the Capital was driven by marked and encouraging increases in activity levels in the services (57.4) and construction sectors (57.3). This contrasted with the manufacturing sector where a reading of 46.6 signified a sharp contraction. This was the deepest contraction since pandemic-era 2021 and dampened the overall rate of growth in business activity in Q1.

New orders levels in Dublin, which are an indicator of businesses’ project pipelines, also expanded at a strong rate (55.2) in the quarter. This was the most significant expansion in a year and also followed a contraction at the end of 2022. Across the Rest of Ireland, new orders also grew but at a weaker rate (51.4) in the quarter.

In further positive news for the Capital’s labour market, employment levels expanded amongst Dublin businesses in Q1. Firms in the Capital added to their workforce numbers for a ninth consecutive quarter, resulting in a PMI reading of 55.0 which exceeded the equivalent rate for the rest of the country (52.6). Such expansion rates across the country will have contributed positively towards a labour market which is at or near ‘full employment’.