The latest Dublin Economic Monitor (DEM), published this morning by the four Dublin Local Authorities, shows that although the Dublin economy remains severely impacted by Covid-19, it is prepared for recovery once conditions permit.
Employment levels in Dublin’s economy fell to below 692,000 in the fourth quarter 2020, while the number of Pandemic Unemployment Payment recipients surged to over 148,000 at the end of January 2021.
The labour market in the Capital continued to be decimated in late 2020 and into 2021 with especially sharp contractions in the services and construction sectors – undoubtedly related to the Level 5 restrictions imposed in the quarter.
Dublin’s IHS Markit Purchasing Managers’ Index (PMI) showed a decline in business activity in the fourth quarter 2020 as both new orders and employment levels reduced. The services sector was the main contributor to this decline with its PMI dipping to 48.0 in the quarter, thus critically crossing the 50 mark which separates growth from contraction. The overall PMI for the Capital stood at 49.2, down from 51.2 in the third quarter 2020.
According to data from MasterCard, retail spending in the Capital fell by 4.8% quarter on quarter in the fourth quarter 2020, but remained 1% above the same quarter in 2019. The main driver of this year on year increase was eCommerce (+44%), though both Entertainment (-70.1%) and Discretionary (-47.2%) spending remained at exceptionally low levels compared to a year previous.
In the Dublin housing market, transaction levels remained low and prices continued on an upward trajectory at the tail end of 2020. Notably, house completion levels reached a new peak in the fourth quarter 2020, though there is evidence that supply in the form of commencements is drying up.
Transport and travel around the Capital continued to be significantly affected by the pandemic. Public transport usage was down by over 57% year on year in the fourth quarter 2020, while traffic volumes on eight main thoroughfares in Dublin dropped by 41% year on year in February. Dublin Airport passenger volumes plummeted by over 91% to 720,000 in the fourth quarter. Dublin Port’s throughput levels surged to over 10 million tonnes in the quarter as both imports and exports increased substantially with Brexit stockpiling and online retailing likely driving this.
Commenting on the DEM’s findings, Chief Economist with Grant Thornton, Andrew Webb said, "As we move further into 2021, our economic fortunes now feel exclusively wedded to how fast the vaccine rolls out. It is unsurprising, given the restriction levels in place over this recent quarter, that many indicators in this Economic Monitor have moved sharply in the wrong direction. However, hope comes from the evidence of sharp increases in activity that followed previous easing of restrictions as this points towards pent up demand and an economy that will move swiftly through the gears to regain lost ground. A recovery is certain but the timeline, unfortunately, is not."