Construction BUSINESS

The latest Purchasing Managers’ Index (PMI) survey from S&P Global reveals that Dublin’s private sector experienced its most subdued expansion of the year in the final quarter of 2023. The headline rate stood at 51.9, marking a decline from 53.5 in Q3 and 55.5 in the initial quarter of the year.

Examining the sectors, the services sector spearheaded the overall increase, while manufacturing returned to growth for the first time since Q2 2022. However, construction activity witnessed a decline, putting an end to three consecutive quarters of expansion. Meanwhile, output across the Rest of Ireland in Q4 remained narrowly in the expansionary territory at 50.3.

Despite the softening growth, employment in Dublin remained resilient, extending a three-year sequence of growth. However, the rate of job creation moderated from its robust performance in the third quarter. A similar trend was observed across the Rest of Ireland, albeit at a slightly slower pace than in Dublin.

Looking ahead, New Orders in the capital registered a decline in the final quarter, the first contraction since Q4 2022, with a headline rate of 49.4 indicating a marginal fall in new business at the year’s end. This contrasts with the Rest of Ireland, which saw new orders slightly expand in Q4 following a contraction in Q3.

As the year concluded, business activity in both Dublin and the Rest of Ireland continued to expand, but at their slowest rates of the year. In the capital, growth in manufacturing was offset by a contraction in construction. While employment trends in Dublin remained resilient, the first contraction in new orders in a year raises concerns about the impact of ongoing global uncertainty and the higher interest rate environment.

Andrew Harker, Economics Director at S&P Global Market Intelligence, commented on the PMI findings, stating, “While firms in Dublin continued to expand their output at the end of 2023, the drop in new orders in the fourth quarter is a cause for concern. Companies will be hoping that this was just a blip amid weakness in construction at the end of the year and that inflows can pick up again at the start of 2024, thereby enabling them to keep increasing activity and boosting labour market prospects. While construction acted as a drag on the private sector in Q4, it was pleasing to see manufacturing output return to growth, joining services in expansion territory.”

Source- Dublin City Council