Dublin economy enjoys growth in second quarter, but caution sounded over unemployment nationally

Retail spending, employment and foreign direct investment (FDI) in Dublin all increased in the second quarter of the year, according to the latest Dublin Economic Monitor published by the four Dublin local authorities.
The Dublin S&P Global Purchasing Managers’ Index (PMI) showed a softening in the rate at which activity is expanding, but the “robust” services sector continued to drive growth, while an increase in construction activity likely reflected the acceleration in house building in the capital.
In contrast, a deepening downturn was registered in manufacturing, which has been in contraction for seven of the last eight quarters.
According to MasterCard data, meanwhile, retail spending in the Dublin economy continued to increase in the second quarter, maintaining the moderate growth rate recorded in the first three months of the year.
Total expenditure increased by 0.7 per cent compared to the first quarter and was up 2.3 per cent compared to the second quarter of 2023.
Spending by consumers has now risen on a quarter-on-quarter basis in every quarter for four years, despite challenges including the Covid-19 pandemic.
Growth in the second quarter of this year was driven by entertainment spend, which increased by 1.5 per cent compared to the first quarter, providing the hospitality sector with a boost.
A 1.2 per cent quarterly increase in sales in department and clothing stores further supported the theory that consumers are gradually spending more on “non-essential” areas, the report also noted.
Dublin’s unemployment rate fell to a seasonally adjusted 4.5 per cent in the second quarter, as employment levels among Dublin residents gained further momentum to reach a new peak of 826,600.
This comes in spite of a gradual descent in Dublin job postings, which have been moderately declining towards more normalised levels.
FDI into Dublin has increased rapidly to “exceptional” numbers after a slow start to the year, the Dublin Economic Monitor also outlines, while housing commencements across Dublin reached a new peak of more than 7,500 in the second quarter.
This is more than double the number seen in the same period in 2023. In April alone, construction commenced on almost 6,000 units, the highest monthly total since records began in 2011.
“As we head into budget season, this Dublin Economic Monitor suggests almost all is well. Activity in the private sector is up for the sixth consecutive quarter, and consumer spending in the capital has sustained an upward trajectory that began four years ago,” said Grant Thornton chief economist Andrew Webb.
“One note of caution comes via national unemployment figures – with over 16,000 more unemployed nationally than one year ago, we are less able to call the strength of the labour market with absolute certainty. We will watch labour market indicators particularly closely over coming editions.”