A recession in Dublin is "an increasingly realistic possibility" according to the latest Dublin Economic Monitor published this morning.
Mastercard data shows that spending in the capital fell by 8.3% from Q4 2021 to Q1 2022.
Department and clothing stores were the hardest hit, with spending falling 28.3% quarter on quarter.
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However, the job market remained "broadly stable" in the first five months of the year, with jobs listings website Indeed showing that vacancies in May were most common in the facilities and retail sectors.
Dublin’s S&P Global Purchasing Managers’ Index shows that business activity in the Capital’s private sector increased at a sharp and accelerated rate in Q1 this year as Omicron fears faded.
The Purchasing Managers' Index had a reading of 60.1 (a reading above 50 signifies growth).
However, S&P Global have warned thzst the Russian invasion of Ukraine, and intensifying cost pressures, may limit growth in Q2.
Chief Economist with Grant Thornton Andrew Webb said it suggests a recession is "increasingly likely".
He said: "While forecasters are not yet calling a recession, there is a growing number of clues in the data to suggest a recession is increasingly likely.
"Cost of living pressures are pushing consumer and business sentiment into more downbeat territory, reflected in MasterCard SpendingPulse data and a softening of new job listings.
"All eyes are now on consumers to see if downbeat sentiment turns to reduced spending, prompting an economic downturn."
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