The latest Dublin Economic Monitor (DEM), published yesterday morning by the four Dublin Local Authorities, shows the deep and widespread economic implications of Covid-19 for the Dublin economy. The monitor covers 14 key indicators, consumer spending data from the MasterCard SpendingPulseTM and provides regular insights into different aspects of Dublin’s economy.
The data shows that activity across the Dublin economy collapsed in the second quarter of 2020 as measures to limit the spread of Covid-19 had severe implications for residents, businesses and visitors alike. Employment levels decreased by over 33,000 year on year (YoY), business activity contracted at record rates, while usage of Dublin’s airport, port, and public transport system all fell substantially.
The PMI fell to 25.2 (where 50 = no change), signifying the severe contractions which occurred across manufacturing, services and construction in the quarter. The declines in output and new orders during the second quarter exceeded those seen during the worst of the global financial crisis. Services were particularly affected, likely due to the importance of the sector for economic activity in the Dublin region.
Weak business activity was further reflected in the office market where vacancy rates increased in the second quarter, while public transport usage declined by over 76% YoY as a combination of travel restrictions and remote working reduced residents’ and visitors’ movements.
Passenger throughput at Dublin Airport fell by over 98% YoY in the second quarter 2020, and this had severe implications for the tourism and hospitality sectors in particular. Hotel occupancy rates fell as low as 5.9% in the second quarter as domestic and international travel restrictions limited visits to the Capital. Such low demand for hotel rooms also affected prices, with average daily rates falling by over 40% YoY.
The monitor also underlines the deep impact which the global pandemic is having on retail spending in the Dublin economy. Sales fell by 12% YoY in the second quarter according to MasterCard, with significant YoY declines recorded in the discretionary and household goods categories in particular. A clear shift towards eCommerce is evident, with traditional bricks-and-mortar retailers such as department stores suffering as a consequence.
Retail spending by tourists in Dublin fell to negligible levels in the second quarter, with declines of over 50% recorded across each of Dublin’s major international markets. The greatest contraction was in the Chinese market where tourist spending fell by 94.3% YoY. This was followed by the more sizeable tourist markets of France (-84.1% YoY) and the UK (-73.3% YoY).
Commenting on the research, Chief Economist with Grant Thornton, Andrew Webb said, "The second quarter has brought the deep impact of the economic shutdown into sharp focus. Key indicators of the economic health of the city all displayed dramatic downturns. Employment levels in Dublin fell, business activity contracted markedly, while travel patterns in to and around the city region also declined significantly."
He added, "As the economy moves tentatively out of lockdown, some green shoots of economic recovery have emerged, with declining numbers now on income supports and signs of increased activity in tourism. The third quarter will provide more evidence of the full impact of the downturn and whether the early momentum from the lifting of lockdown is maintained into the autumn."