Dublin Economic Monitor - Issue 37 | June 2024

Highlights

Dublin’s unemployment rate fell to 4.8% (SA) in Q1 2024, as employment continued to increase to reach a new peak of 812,800 (SA) residents employed.

Retail spending in the Capital expanded by 0.9% QoQ and 2.9% YoY in Q1 2024, continuing a sequence of 14 consecutive quarters of YoY spending growth.

Housing completions contracted sharply in Q1 2024, falling by 35% QoQ and 25.2% YoY, but new residential commencements recorded sustained growth of 8.6% QoQ and 58.2% YoY.

Business activity showed solid rates of growth in Q1 2024, driven by expansion in the services and construction sectors, the latter of which returned to growth following a weak final quarter of 2023.

Passenger journeys on Dublin's public transport network continued to increase to 65.7 million passenger journeys (SA) in the first quarter of 2024, following a record year in 2023.

Hotel occupancy rates in Dublin increased MoM between February and April 2024, rising from 70.7% to 84.9% in the period.

Welcome to the June 2024 issue of the dublin economic monitor

The Dublin Economic Monitor is a joint initiative on behalf of the four Dublin Local Authorities, and is designed to be of interest to those living and doing business in Dublin or considering locating here. The report is produced by Grant Thornton with inputs from S&P Global and MasterCard.

There are two special feature articles this quarter, both of which centre on the retail market in Dublin. The first is from Juliet Passmore, Economist at Dublin City Council and focusses on the impact of hybrid working on socialising in the capital and the shift to online spending. The second article is by Jean McCabe, CEO of Retail Excellence Ireland.

The Monitor is divided into the following themes for Dublin: Economy

Business Developments

Retail Hospitality

Labour Market

International Rankings Housing Transport & Travel

For more data and insights see: www.dublineconomy.ie

The next edition will be published in September 2024.

www.dublineconomy.ie

@DCCEconDev

Rebound and growth – a spring in the economic step?

The EU Commission’s Spring 2024 economic outlook presents a more upbeat assessment of the economy than any recent editions. EU growth of 0.3% for the first quarter of 2024 exceeded expectations, and growth of 1% for 2024 and 1.6% for 2025 is now expected. In the Euro Area, GDP growth in 2025 is projected to be slightly lower, at 1.4%. Key issues that ‘economy watchers’ have been tracking are inflation and interest rates. Inflation is projected to continue declining over the forecast horizon. From a peak of 10.6% in October 2022, inflation in the Euro Area is estimated to have reached 2.4% in April 2024. Across 2024 it is now expected to reach 2.5%, before declining to 2.1% in 2025. A rapid fall in retail energy prices throughout 2023 was the main driver of the inflation decline, but underlying inflationary pressures started easing in the second half of 2023, amidst the weak growth momentum.

This inflation context prompts strong expectations of interest rate reductions. Markets now expect a more gradual pace of policy rate cuts than previously thought. Euribor 3 month futures suggest that Euro Area shortterm nominal interest rates will decrease from 4% to 3.2% by the end of the year and to 2.6% by the end of 2025. There should not be much time to wait for the first cut.

The EU’s view on Ireland’s economy is for rebound and growth by 1.2% in 2024 and 3.6% in 2025. This is supported by an improvement in global trade, falling inflation and a strong labour market.

For all the renewed positivity around economic prospects, research by Grant Thornton has revealed that Irish businesses’ optimism about Ireland’s economic outlook for the next 12 months has slipped slightly, falling five points from 78% to 73%, according to the latest International Business Report (IBR), which provides insights into the attitudes of 10,000 mid-market businesses across 28 economies. Factors responsible for this shift in mood are thought to be the ongoing challenges posed by increased labour costs, a lagging sense of pain and unease over inflation and higher interest rates.

Despite this slip, Irish medium sized businesses are still more optimistic about the economic outlook than Ireland’s closest neighbours, with a Euro Area average of 54% and a UK average of 59%. This level of positivity is reflected in the Irish research participants’ view of their future business performance, with almost three-fifths of the Irish companies surveyed expecting their profits (59%) and revenues (56%) to increase over the coming 12 months.

The EU’s view on Ireland’s economy is for rebound and growth by 1.2% in 2024 and 3.6% in 2025.

Among the factors weighing down the Irish business community’s mood are labour costs, with approximately a third (32%) of companies surveyed highlighting it as a constraint on their ability to grow and expand. Linked to this, almost seven in ten (68%) Irish mid-market firms plan to increase salaries in the next twelve months, reflective of a tight labour market and employee pressure in response to the cost-of-living crisis.

The pessimism about labour costs is also reflected with a fall in the number of Irish medium sized businesses that expect to grow their headcount over the next twelve months, with only four in ten (41%) of the Irish companies surveyed expected to recruit compared to just over half (53%) in the last round of research.

There was also a spike in Irish companies citing economic uncertainty as a factor in holding their business back, jumping from 20% in the previous round of research to 33% according to the latest data. On a positive note, reflective of falling utility bills, the portion of Irish companies citing energy costs as a burden on their business fell from 53% to 32% in the latest International Business Report.

Encouragingly from a competitiveness and productivity point of view, a record level of Irish midmarket firms plan to invest in technology over the next twelve months, with almost seven in ten (67%) companies surveyed flagging their plans to spend in this area.

With all the hype around AI and its potential impact on business, it is little surprise that an increasing number of Irish businesses are planning to invest in this potentially transformative area. Approximately a quarter (24%) of medium size Irish businesses said they plan to invest in AI over the next year, with almost half (48%) that had not stating that it remains a potential investment area for the future. A third (33%) of companies surveyed saw investment in AI as a means of delivering cost savings, with over half (53%) stating that they were investing in the technology to improve internal workflows. With the stagnation and uncertainty of the past few years moving into the rear view mirror, businesses are seemingly able to turn their attention to strategic investment and growth plans.

Business Developments

Recent Boosts for Dublin’s Jobs Market and Connectivity

Jobs Market Undulations

The Dublin labour market remains in rude health with low unemployment a hallmark of its strong recent performance, though there have been recent undulations. TikTok is to the fore in this regard as more than 250 people were made redundant at its Dublin office in April as part of a global restructuring process. Citigroup also announced sizeable layoffs with 168 of its Dublin jobs to be cut as part of what the company says is a “global reorganisation to align our structure with our strategy and simplify the bank”.

In more positive labour market developments, Bristol Myers Squibb announced a $400 million investment in its Cruiserath facility in Dublin 15 which will result in the creation of 350 new jobs. The roles will bring the facility’s headcount to more than 1,000 as the company plans to expand its manufacturing and laboratory capacity and support its portfolio across a range of therapies, including oncology, immunology and haematology. Also in the pharmaceutical space, Irish-owned companies APC and VLE Therapeutics are to create 300 jobs in Dublin as part of a €100 million investment in a 130,000 sq ft ‘medicine accelerator’ campus in Cherrywood.

Infineon Technologies also announced an expansion of its Research and Development presence in Ireland with 100 new jobs between sites in Cork and Dublin. Additionally, Canadian automotive fleet management firm, Element Fleet Management, is entering Ireland with plans to create 70 jobs at its new leasing hub in the Capital.

Dublin City Centre Taskforce

An Taoiseach Simon Harris has announced the launch of a Dublin City Centre Taskforce which will operate for a 12-week period and ultimately feed into a longer term action plan for the Capital. The taskforce will make recommendations to make the city a better place to live, work, do business and visit. The emphasis will be on cultural spaces, public transport, and issues including anti-social behaviour and litter. An Taoiseach said the Taskforce would produce a report and recommendations to “return Dublin’s City Centre to the vibrant, safe destination we all want it to be.”

The taskforce will make recommendations to make the city a better place to live, work, do business and visit.

Dublin-Belfast Connectivity

The Enterprise rail service connecting Dublin and Belfast is to benefit from €165 million in funding up to 2029. Travel times are expected to fall below two hours as a result of the investment, with an hourly timetable to be introduced. Eight modern and sustainable trains running on electricity and battery power will replace the existing fleet of four Enterprise trains which currently have journey times of between two hours and five minutes and two hours and fifteen minutes.

Commercial Property Issues

Dublin’s commercial property market remained in a challenged position in Q1 2024. According to CBRE, office take-up was at its lowest ebb in a normalised market environment since the Financial Crisis. While the level of office stock that is currently ‘reserved’ remains healthy, vacancy rates – as shown in the chart – continued to climb in both Dublin 2/4 and the Dublin Suburbs in the quarter.

Business Activity Shows Solid Increase in Q1 2024

The Dublin private sector started 2024 on the front foot as renewed growth of new orders supported faster rises in output and employment. The dominant services sector was the main source of expansion. The positive performance in Dublin was consistent with the picture for the Rest of Ireland which also began the year in expansion mode.

The Dublin Purchasing Managers’ Index (PMI), which tracks business activity in the Capital, showed solid rates of growth in the first quarter of 2024. The PMI reading for Dublin rose to 53.1 from 51.9 in Q4 2023, and thus exceeded the 50 mark which separates growth from contraction. It also surpassed the PMI reading of 51.1 which applied across the Rest of Ireland in the quarter.

On a sectoral basis, growth in activity in Dublin was driven by a faster increase in the dominant services sector (54.1). The construction sector returned to growth (51.9) following a weak final quarter of 2023. This is a positive development which may be related to a sharp increase in residential construction at the start of 2024. Notably, it is also in stark contrast to the Rest of Ireland where the sector has contracted in four consecutive quarters. Activity levels in Dublin’s manufacturing sector dipped marginally below the 50 mark (49.9) in Q1. This compares with a strong reading of 53.3 in Q4 2023 and signifies a modest slowing of activity.

In response to the accelerating growth in business activity, Dublin businesses continued to expand their staffing levels in the first quarter of the year. The latest increase in employment (53.9) was solid and slightly faster than in the previous quarter (52.0). Relatively robust job creation was also seen in the Rest of Ireland with its index accelerating to 52.8.

New orders amongst Dublin businesses, which are a bellwether and leading indicator for future activity, also increased in Q1. A reading of 52.7, while down from 55.2 in Q1 2023, was up QoQ (+3.3) and remained ahead of the Rest of Ireland (51.7).

RETAIL

Retail spending grows despite contraction in hospitality

MasterCard Total Retail Sales Index (SA)

Retail spending in Dublin continued on an upward path in early 2024 despite the lingering effects of inflation, and relatively high interest rates. Expenditure by consumers in the Capital rose by 0.9% QoQ and 2.9% YoY in Q1 with broad growth across most categories. Spending by consumers has now risen YoY for 14 consecutive quarters – though the pace of growth has declined as the postpandemic recovery has matured.

The QoQ growth rate in Q1 represented a minor strengthening from previous quarters, primarily driven by Necessities sales which rose in value by 1.7% QoQ. This may be a partial reflection of consumers increasingly choosing to eat and drink at home – a theory further

supported by a decline in Entertainment spending at hotels, bars and restaurants of 2.5% in the quarter.

The contraction in such spending was the most significant since the tail end of the pandemic in 2021 and represents a disappointing start to 2024 for the hospitality sector.

Spending in both the Household Goods and Discretionary categories was more promising in Q1 with respective QoQ expansions of 1% and 0.8%. This indicates a level of robustness in consumer demand, in spite of the falloff in spending in hospitality. Expenditure via eCommerce platforms also recorded growth of 0.8% QoQ, thus reversing a modest contraction at the end of 2023.

METHODOLOGY

US tourist spending continues to decline RETAIL

Tourism spending in the Dublin economy returned to growth in Q1 2024 with expansions of 0.9% QoQ and 4.7% YoY. This followed a weak final quarter of 2023 where spending contracted marginally.

The French market was integral to the QoQ expansion in Q1. Spending amongst French tourists rose by over 26% in the quarter, though this market has been on an uneven path – with a particularly sizeable contraction recorded between Q2 and Q3 2023. Growth in Dublin tourist spending was further supported by the UK and German markets in Q1, with respective expansions of

Irish Consumer Price & Energy Product YoY Inflation, March 2022-March 2024

5.5% and 3.3% QoQ.

The US market recorded a second consecutive decline in spending in the first quarter. Spending by tourists from this market – which is of vital importance – declined by 3.3% QoQ, and this will be of concern as the summer season approaches. The Chinese market also saw declining expenditure levels with a reduction of 23.2% in Q1.

Tourist spending growth was more pronounced at 1.6% across Ireland in Q1. The French and UK markets were the core drivers with expansions of 17% and 3.7% respectively, while tourists from the US contributed positively (+0.8% QoQ) – in contrast to Dublin.

Decline in Inflation to Benefit Consumers

Inflation has been a dominant theme in Irish economic discourse since the onset of both the pandemic and the war in Ukraine. As shown in the chart, monthly inflation peaked at 9.3% in October 2022 – driven in large part by energy inflation which reached in excess of 50%. A steady reduction in the inflation rate has since transpired, resulting in posting of 2.9% in March, and this will have positively influenced the latest Mastercard figures. Further tailwinds are expected over the coming months as the European Central Bank has signalled its intent to cut interest rates as inflation across the Eurozone subsides.

Dublin hotel prices reduce yoy in early 2024

Dublin Hotel Supply & Occupancy Rates

Restaurant demand lifts in march after weak start to 2024 HOSPITALITY

Hotel occupancy rates in Dublin increased MoM in the three months between February and April 2024. Occupancy rates climbed from 70.7% in February to 81.2% in March and further increased to 84.9% in April. YoY comparison highlights stable rates across the three months, with April 2024 recording a minor 0.2% decline on the same month the previous year. Average daily rates by month have fallen in 2024, with April 2024 recording a 9% drop in prices when compared to April 2023. The index of supply increased from 120 in the month of February to a new peak of 135 in March, with April remaining close to March levels. Key holidays including St. Patricks Day and the Easter Holidays will have increased the demand for hotel rooms in March, as well as major sporting events including the Six Nations which was played throughout February and March.

The volume of seated diners at restaurants in Dublin was 53.5% above the 2019 baseline on the first Saturday of April 2024. This followed a downward trend early in the New Year which saw the volume of seated diners in the Capital dip below the 2019 baseline in February. The third week of March 2024 represented the biggest change relative to 2019, with a close to threefold increase in the number of diners visiting Dublin's restaurants. The relatively weak early months of 2024 are reflected in the Mastercard SpendingPulse data on page 6 of this issue which shows a 2.5% QoQ decline in Entertainment spending at hotels, bars and restaurants in Q1.

Seated Diners at Dublin Restaurants (% Change Relative to 2019)

Post pandemic shift in city centre activity

Juliet Passmore Economist, Dublin City Council

Workers are socialising and shopping less in the city centre now than before Covid according to the latest Your Dublin Your Voice survey.

Hybrid working sees shift in socialising

The survey, carried out in May, finds that a change in working patterns since the pandemic is influencing socialising patterns. 60% of workers indicated that they currently have hybrid arrangements with the typical week split evenly with 2.5 days on site and 2.5 days remotely. Workers, while on-site, continue to buy lunch, coffees, shop and go for drinks or dinner but there is a decrease in the frequency at which they do it. This is particularly pronounced when it comes to socialising in the city after work. This change is also seen in a small but discernable shift in spending on socialising from the city to the suburbs. This in turn may by driven by the fact that although 75% of workers indicate that they work in the city on a Tuesday, Wednesday or Thursday, this drops to 48% on Fridays the traditional day for post work socialising. Overall workers are still socialising in the city but less frequently.

Online channels having an impact

The reduction in shopping in the city appears to be driven by a different, albeit Covid related, change. The survey highlights a significant shift to spending online for fashion, household durables and personal electronics with approximately a third of all spending on the first two through online channels and 46% of spending on the latter. Since 2018, the rating for shopping in the City has fallen significantly from 78% to 57%. This fall is most likely influenced by both a deterioration in the perception that there is a good variety of shops (70% in 2018 to 49% currently) and the deterioration in people’s perception of safety in the city during the day (72% in 2018 to 67% currently).

Although 75% of workers indicate that they work in the city on a Tuesday, Wednesday or Thursday, this drops to 48% on Fridays, the traditional day for post work socialising.

Value for money

The negative trend in people’s perception of value for money for shopping and socialising surprisingly slowed in Dublin in 2024. That said, only 17% of people think that eating out is good value, followed by 14% for shopping and 6% for the pub. Respondents indicate that they are spending more socialising and shopping compared to last year but that in the next 12 months they intend to spend less, particularly in the pub.

Overall, the survey finds that Dubliners have a more negative view of their city than previously with those indicating that they feel it is vibrant falling from a high of 89% in 2018 to 53% currently. Meanwhile, safety, cleanliness and pedestrianisation are the top three suggestions when it comes to improving the attractiveness of the city, unchanged from 2022.

"In a typical week, which days of the week do you work in the office / on site?"

Unemployment rate declines in Q1 2024

The unemployment rate in Dublin fell to 4.8% (SA) in Q1 2024, indicating a strengthening of the labour market at the start of the New Year. This was representative of a 0.3 percentage point (pp) decline QoQ and a 0.5pp reduction YoY. Nationally, unemployment dropped to 4.3% (SA) in the quarter as the labour market remained in rude health. This reflected a 0.2 pp decline QoQ as close to 'full employment' conditions continued. Such low unemployment rates are of significant benefit for the economy and Exchequer, though skills and people shortages are challenges for many organisations.

Employment levels reach new peak in Q1 2024

Employment levels amongst Dublin residents continued to increase to reach a new peak in Q1 2024. The number of residents in employment reached 813,500 (SA), in the first three months of the year, representing a 2% (16,100 jobs) increase QoQ and a 2.9% (22,700 jobs) expansion YoY. QoQ growth was mainly attributable to a 15% increase or 5,300 additional jobs in the construction sector. The public and private services sectors recorded modest increases of 2.6% and 1.8% respectively. In contrast, employment in industry declined by 5.9% in the quarter. The increase in construction employment may be related to the residential sector where the Government has committed to building close to 40,000 houses in Ireland in the year.

Employment by Broad Sector '000s (SA)

Dublin job postings reach post-pandemic low

Job Postings on Indeed (Feb 2020

= 100)

The number of Dublin job vacancies posted on the Indeed website continued on a broad downward trajectory in the first five months of 2024. The total number of jobs postings stood 5.1 percentage points (pp) below the 2020 baseline in May, predominantly in line with the preceding months. In contrast, job listings across the rest of Ireland remained 66.8pp above the 2020 baseline in May 2024, highlighting the ongoing excess demand for labour outside of Dublin. Market research indicates healthcare, engineering, construction and ICT roles remained in high demand across the country in the first half of 2024.

Slow start for Dublin FDI in Q1 2024

Based on a rolling 4 quarter average, foreign direct investment (FDI) into Dublin declined in Q1 2024. The average capital investment declined by 15% QoQ and 53.4% YoY to $622 million. This was due to a slow start in Q1 where just $338 million was invested. The number of FDI projects remained stable QoQ with a rolling 4 quarter average of 30 projects, but declined by 9.2% YoY. The number of jobs created increased 4% QoQ to 1,948 based on rolling 4 quarter average, though this did represent a 22.6% decline YoY. In absolute terms, all European cities analysed recorded a decrease in FDI projects in Q1 2024, due in part to slowing economic growth across the region. Despite this, FDI per capita based on a rolling 4 quarter average compared favourably in Dublin for the quarter at $540.7.

Dublin ranked as a top European location for start-ups

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 opposite).

Start-Up Hotbed

Dublin has been ranked as the 6th best European city for start-ups. According to the Knowledge Academy, which compiled the ranking, the Capital’s position was a reflection of its highly-educated and entrepreneurial workforce, tax exemptions and incentives. A score of 8.1 out of 10 placed Dublin behind its counterparts in Paris (8.87), Madrid (8.84), Barcelona (8.83), London (8.27) and Lyon (8.23). The availability of office spaces, access to public transport and university quality were advantages for the Capital, though the city had the third highest rental rates for accommodation – behind only London and Geneva. Quality universities, broadband speeds, and office availability were the key features behind Paris’s position as the top city for start-ups in Europe.

A Globally Attractive Location for Professionals

Dublin has retained its place as 36th most attractive city in the world for professionals to work in. This is according to the Stepstone Group, the parent company of IrishJobs, which conducted a deep dive into the main reasons why professionals choose a specific city for work purposes. On the report’s findings, Sam Dooley, Country Director of the Stepstone Group Ireland, said that “it is encouraging to see Dublin retain its position in the rankings, reflecting its continued status as a regional hub for employment opportunities across Europe”. Quality of life was a key driver behind the Capital’s position which

remained unchanged from the last report in 2020 and was on par with the national ranking of 36th globally.

High Air Quality

Air quality standards in Dublin have been rated as the 9th best out of a sample of 120 major cities worldwide. An air quality report from IQAir found that the levels of fine particulate matter, or PM2.5, which is the most dangerous form of air pollution, dropped significantly in the Capital during the winter months of 2023 – and was critical to its high ranking. Tullamore, County Offaly had the highest air quality in Ireland, with Paris, Chicago and Auckland taking the top positions globally. Hanoi in Vietnam had the worst air quality of the 120 cities according to the report.

Street Cred

Camden Street in Dublin has been rated as one of the “coolest” avenues, thoroughfares, backstreets and boulevards on the planet by Time Out magazine. The publication placed the south inner-city street in 22nd position globally. According to the ranking, Camden Street has retained a “no-frills, post-modern grit, despite becoming a hotspot for creative spaces” and is “characterised by unpretentious pubs, political street art and a buzzy dining scene”. High Street (Melbourne), Hollywood Road (Hong Kong) and East Eleventh (Austin) topped the magazine’s rankings.

The Knowledge Academy

DUBLIN'S INTERNATIONAL RANKINGS

DUBLIN'S LATEST INTERNATIONAL RANKINGS

Attractiveness for start-ups including available office spaces, rental prices, proximity of top universities, and the speed of internet.

Residential property transactions fluctuate in Q1 2024

Dublin Residential Property Transactions (SA)

Transactions in Dublin’s residential property market fluctuated in the first three months of 2024. Just over 2,000 properties (SA) were sold in March 2024, reflecting an increase of 18.4% MoM - though this did represent a 6.1% YoY decline. Despite increased residential construction levels, new builds accounted for just 23% of transactions in the month, compared to 30% a year previously. Earlier in Q1, total transactions in the Capital were down MoM in January (-22.2%) and February (-1.9%) following a strong end to 2023. Across Ireland, housing transactions declined by 0.7% MoM and 8.1% YoY in March. Fluctuations in the quarter may be driven by uncertainty given buyers faced increases in borrowing costs as interest rates remained at relatively high levels.

Residential property price rises ease MoM in Q1 2024

Residential Property Price Index (2015 = 100)

Residential property prices in Dublin continued to grow but at slowing MoM rates in the first quarter of 2024. House prices in the Capital reached a new peak index value of 156.9 in March 2024, however MoM growth rates fell from 1% in January to 0.6% in March. In contrast, 7.2% YoY growth in prices was recorded in March - the highest rate since October 2022. Prices rose at a similar rate (+7.4%) YoY in March outside of Dublin but only increased by 0.2% MoM. In Dublin and across Ireland, affordability remains a challenge though a blend of Government policy interventions, rising supply, and falling ineterst rates are expected to be influential over the remainder of 2024.

Average residential rents exceed €2,000 in final quarters of 2023

Average residential rents in Dublin rose above €2,000 for the first time in Q3 2023 and grew further to €2,035 in the final quarter of the year. Rents in the Capital rose by 1.4% QoQ and 6.7% YoY in Q4 as limited supply and high demand continued to dominate. This was the highest rate of YoY growth since Q3 2021 and reflects the ongoing challenge of affordability for renters in the Capital. Average rents reached €1,469 across the Greater Dublin Area (GDA) and €1,093 outside the GDA in Q4. Growth rates stood at 6% YoY across the GDA and 12.7% YoY outside GDA, underlining the national issue of rising rents.

Housing completions contract sharply in Q1 2024

Dublin House Commencements & Completions

The supply of new units entering Dublin's housing stock contracted sharply in Q1 2024. Just 2,184 new units (SA) were completed in the quarter. This was down by 35% QoQ and 25.2% YoY. According to the CSO, six of the eight regions in Ireland saw a YoY fall in completions in Q1 2024, with Dublin recording the largest relative decline. In contrast to the reduction in completions, Dublin housing commencements increased to 4,347 units (non-SA) in the quarter. This represented sustained growth of 8.6% QoQ and 58.2% YoY and will feed through to completions over the remainder of 2024 and into 2025.

TRANSPORT & TRAVEL

Public transport journeys continue to increase in early 2024

Public Transport Million Trips (SA)

Following a record year in 2023, passenger journeys on Dublin's public transport network continued to grow in the first quarter of 2024. A total of 65.7 million passenger journeys (SA) were recorded in Q1, representing growth of 1.4% QoQ and 7.6% YoY. Irish Rail recorded the largest expansion of passenger journeys, increasing by 4.9% QoQ to 8.4 million (SA) in the quarter. QoQ increases in passenger journeys were also recorded on the Luas network (+364,000, +2.9%), as well as Dublin Bus (+159,000, +0.4%) and Bus Eireann (+5,600, +0.3%). Plans to further expand Dublin's transport network have continued in 2024 as the Metro connecting Swords and the City Centre has entered the planning system, with a decision expected in Q4.

Road traffic volumes reach a peak in April 2024

Average Daily Traffic Count '000s (SA)

Average daily traffic counts in Dublin continued to increase over Spring and early Summer 2024, reaching a peak volume in April. The latest data from TII indicates that total traffic volumes on eight main thoroughfares in the Capital stood at over 705,000 (SA) in the third week of May. This represented a decline of 5.3% versus the same week in April where volumes exceeded 740,000 (SA), and subsequently rose to almost 755,000 (SA) at the end of that month. Such expansions in road usage come in spite of high fuel costs, rising tolls and reduced public transport fares, and may be a reflection of the growing

and workforce in Dublin.

Dublin

Dublin airport passengers steady in Q1 2024

Dublin Airport Passengers '000s (SA)

Quarterly passenger numbers at Dublin Airport remained steady in the first three months of 2024. A total of 8.4 million passengers (SA) passed through the airport in Q1, reflecting a minor 0.1% decline QoQ. There was YoY growth of 2.9%, however, which saw 238,000 more passengers travel via the airport in first three months of 2024. March was a particularly strong month in Q1 2024 with passengers taking advantage of the Easter holidays for international trips, and also travelling via the airport for high-profile sporting events including the Six Nations and international football matches.

Dublin port activity decreases in Q1, despite rising exports

Dublin Port Tonnage Million Tonnes (SA)

Dublin Port's trade volumes declined in Q1 2024. The total volume handled fell by 0.2% QoQ and 2.8% YoY to 8.7 million tonnes (SA) in the quarter. This was largely attributable to a decline in imports. Just over 5.2 million (SA) tonnes of imports were handled in Q1, a decline of 62,000 tonnes (-1.2%) from the same quarter the previous year and -162,0000 tones (-3%) versus Q4 2023. Exports increased by 7.9% QoQ and 2.5% YoY, reaching 3.5 million (SA) tonnes.

SOURCE:

Retailers Continue To Face Significant Pressures

Jean McCabe Chief Executive Retail Excellence Ireland

The first quarter of 2024 has unveiled a complex landscape for retail. Despite a 3% increase in sales over the same period last year, the data is mainly a reflection of inflation. It tells a story of resilience in some sectors where retailers are experiencing growth.

Retail Excellence’s analysis reveals consumer priorities and emerging trends that are shaping the sector. Crucially, spending on essentials has not only held steady but grown, with grocery and pharmacy sales demonstrating the indispensable nature of these goods. A 5.2% rise in grocery sales and an impressive 7.6% surge in pharmacy purchases highlight where consumer priorities lie amidst cost-of-living pressures.

However, the picture is not universally rosy. While there are indications that inflationary pressures are easing, shifting from the 8% inflation of Q1 2023 to close to

2% currently, and grocery price inflation has markedly decreased, inflation continues to be a considerable factor behind the rise in sales values. The sector faces a dichotomy where higher prices contribute to growth figures, masking the more subdued rise in transaction numbers, which only exceeded 1% in four categories.

Particularly telling is the performance of homeware, hardware, and garden centres, which have seen spending contract by 2.5% against the same period last year. This decline noted consistently over the past three quarters, speaks to the broader challenges of high operational costs and the difficulty in passing these onto a global customer

Although the strength of some key subsectors is encouraging, the pressure on margins for many retailers is a real challenge, as they grapple with rising wage costs and working conditions.

base. The clothing sector, too, reflects the impact of external factors like adverse weather conditions, evidencing a marginal decline in sales. Furthermore, department stores and sporting goods stores have fared better, leveraging a strong online presence to register growth. We are acutely cognisant of the significant pressures that Irish retailers are currently facing.

Although the strength of some key subsectors is encouraging, the pressure on margins for many retailers is a real challenge, as they grapple with rising wage costs and working conditions. As we look ahead, there is cautious optimism that consumer sentiment is more settled, and increasing, which could bring a stronger second half of the year.

Thinking about the future of retail, Retail Excellence Ireland’s recent Retail Retreat brought together Ireland’s most influential decision makers in the retail sector to network and share insights into the issues, opportunities and challenges facing the retail landscape going forward. Topics covered included trends in e-commerce, resilience in business and retail as a destination, a topic that is particularly pertinent for Dublin.

With the rise of online shopping and the shift in working practices towards more home working, one could argue there is little incentive for customers to engage in traditional retail. That is why it is so important to create a unique and engaging experience for customers. To create a destination, the property itself as well as the surrounding area must be attractive. This creates a welcoming and safe environment for customers. Reports from retailers is that Dublin City Centre is still 20% behind on footfall in comparison to 2019.

Research from CACI and P-THREE in the UK has found that shoppers who rated a physical retail environment a 5/5 spent 26% more than those who rated it a 3/5. This is why creating an attractive space is so important, as it can lead to customers spending more money. There is a strong signal in this research for how place management and good design can contribute to the viability of retail and city/town centres. Linked to creating a viable and vibrant retail offering is safety. Second to this is the role online plays in driving footfall back into our towns and cities with consumers using online as their shop window & then going instore to buy or choosing click & collect orders online. The consumer

As we look ahead, there is cautious optimism that consumer sentiment is more settled, and increasing, which could bring a stronger second half of the year.

is shopping with a 360-degree approach to retail which gives opportunity to our towns and cities to align with the convenience of click & collect for consumers. In the US, the concept of ‘curb side pick-up’ is prevalent.

The statistics from the CSO, which report that theft and related offences have risen by 12% in Q4, with almost half of this increase due to retail thefts, back up what we are hearing from our members on a daily basis; that the retail industry is increasingly being targeted by criminals across the country. These actions by a small minority have a highly negative effect on retailers and their customers, and something needs to be done to reverse what is a very worrying trend. It needs to be recognised that these figures don’t take into account the daily instances of antisocial behaviour that retailers are experiencing. These have a knock-on effect on staff and customers, and will lead to less footfall at a time when retailers are struggling hugely with the myriad of costs of doing business. Addressing these issues is a crucial element in creating the space for retail to thrive. The issue is multifaceted but one thing that we believe is crucial in dealing with anti-social behaviour & theft in our cities is that there has to be a ‘zero tolerance’ approach.

Dublin Economic Scorecard