Dublin business activity drops to seven year low
Business output in Dublin stagnated in the first quarter of the year as business activity grind to a halt in March, new figures show today.
The latest IHS Markit Dublin Purchasing Managers index fell to 49.9 from 53.7, ending more than seven years of continuous output growth in Dublin.
A figure under 50 signals contraction, while over 50 signals growth.
The IHS Markit Dublin PMI is a survey of business activity in Dublin which uses responses from around 200 businesses every month across the services, manufacturing and construction sectors.
IHS Markit said that manufacturing in Dublin moved into outright decline in the first quarter.
The services and construction sectors, which had stronger momentum in the first two months of the quarter, slowed but just managed to remain in expansionary territory for the quarter as a whole.
But both of these sectors are set to suffer accelerated losses in output as the social distancing policies, which were extended to all non-essential businesses at the end of the month, take hold.
IHS Markit said the Covid-19 induced slowdown looks set to accelerate in the second quarter with new orders in Dublin decreasing for the first time since the third quarter of 2012 as customer demand seized up and staffing levels at Dublin companies fell at the end of March.
Andrew Harker, Economics Director at IHS Markit, said the Covid-19 pandemic has pushed Dublin economic output into contraction in March, resulting in a stagnation across the first quarter as a whole after growth had been recorded in the first two months of the year.
Mr Harker said this in itself was the worst performance for over seven years.
“A decline in March was enough to push the manufacturing sector into contraction for Q1 as a whole, but the Covid-19 lockdown is substantially impacting the services and construction sectors as well,” he said.
“Prior to the outbreak, companies in the capital had been enjoying solid increases in output, meaning that the data for Q1 have held up better than in the rest of Ireland. The effects of the pandemic are clearly going to be felt all over the country though, with the economy suffering a deep contraction at present,” he added.
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