Dublin's economy is in its worst state since businesses were crushed by heavy Covid-19 restrictions last year, according to Dublin City Council's economic monitor.
A survey of business activity during quarter three of this year found economic output is at its "weakest level" since quarter two of 2021 due to the cost of living crisis. At the start of 2021, schools didn't reopen fully after Christmas until March 1 and indoor service in bars and restaurants only returned at the end of July.
Economists have been forecasting a recession in the latter part of 2022 and the findings of this survey support those predictions. There also have been a number of high profile hospitality businesses closing down due to soaring costs - such as Lenehan's Bar and Grill in Rathmines.
Read more: All the Dublin restaurants, cafes and pubs that have sadly closed in recent weeks
The survey revealed the economy was barely in growth thanks to a "resilient" service sector. However, the manufacturing and construction sectors both saw reductions in activity. A DCC spokesperson said: "The latest PMI survey, from S&P Global, shows that business activity in Dublin slowed sharply in Q3 leaving it at its weakest level since Q2 2021.
"The headline rate remained narrowly within expansionary territory at 50.4 [below 50 indicates economic decline] as inflation dampened demand." Both the Manufacturing (48.1) and Construction (43.3) sectors posted reductions in activity while the more resilient Services sector remained within expansionary territory (52.5)."
The spokesperson added that Dublin was affected more severely than the rest of the country. There was some good news as employment rates have continued to expand since early 2021.
"Labour market trends remained strong in Q3 and Dublin firms have now recorded increases in staffing levels on a quarterly basis continuously since Q1 2021," the spokesperson said.
Economics Director at S&P Global Market Intelligence Andrew Harker said: “The Dublin private sector is not alone in seeing a slowdown during the third quarter of 2022 as global demand conditions suffer amid widespread cost of living pressures. Output growth slowed to near-stagnation, with manufacturing and construction actually seeing declines."
He added: "The main positive over the quarter was a further marked expansion in employment as local firms continued to build workforces in the hope that the slowdown doesn’t evolve into a more pronounced downturn."
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