The rate of job creation outside Dublin has surpassed the capital for the first time in two years, according to the latest Purchasing Managers Index (PMI) survey from S&P Global. The survey has also found a notable decline in manufacturing activity within Dublin.
The S&P Global Dublin PMI is calculated using responses from some 200 businesses each month across the services, manufacturing and construction sectors. An index reading of above 50 indicates overall expansion in activity, while below 50 indicates contraction.
The PMI shows that business activity in Dublin continued to increase in the second quarter of the year, albeit at a softer pace than seen in the first quarter. The headline rate stood at 54.9, down from 55.5 at the beginning of 2023.
The survey noted a “solid decrease” in business activity within Manufacturing (46.6) while both the Services (56.8) and Construction (58.7) sectors sustained “sharp rises” in business activity in the second quarter.
An increase in activity was also recorded across the rest of the State, with an index reading of 51.4.
Tight labour market conditions persisted in Dublin in the last quarter, as staffing levels in the capital increased for a tenth consecutive quarter. However, the rate of employment growth (51.8) was the weakest recorded since the beginning of 2021. For the first time since the second quarter of 2021, the rate of job creation for the rest of Ireland (53.7) exceeded that in Dublin.
Strong expansion was recorded in new orders received by businesses (54.8) for the second consecutive quarter. Similar to business activity trends, the rate of increase was softer than seen in the opening quarter of the year. The rest of the Republic also saw an increase in new orders, with an index reading of 52.8.
S&P Global Market Intelligence economist Laura Denman said that the midpoint of 2023 saw the economic trends among Dublin private sector firms “soften somewhat”.
“In line with themes seen for the rest of Ireland and indeed globally, manufacturers have found it increasingly difficult to generate new orders over the past year or so, while service providers continued to benefit from the release of pent-up demand following the Covid-19 pandemic,” she said.
The PMI found a more “subdued” outlook for the second half of the year, as the full impact of global interest rate hikes has not yet fully played out.
