Sharp decline in housing commencements overshadows strong economic growth in Dublin 

For the second straight quarter, growth was recorded across all three economic sectors in Dublin — construction, manufacturing, and services

Housing commencements in Dublin between October and December contracted sharply, hitting a two-year low of 2,747 homes.

Business activity in Dublin showed a marked expansion during the last three months of 2024, with growth recorded across all sectors but a lack of housing commencements and falling foreign direct investment (FDI) raises concerns, the latest Dublin Economic Monitor shows.

The latest reading of the Dublin S&P Global Purchasing Managers’ Index (PMI) stood at 54.7 for the final quarter of last year which is up from 52.8 recorded at the end of September. Any PMI reading above 50 indicates growth.

For the second straight quarter, growth was recorded across all three economic sectors in Dublin. Construction activity saw a PMI reading of 59.6, while services’ reading stood at 55.1 — both of which grew at a faster rate compared to the previous quarter.

While manufacturing production also saw growth, with a PMI reading of 52.7, it did so at a softer rate than the previous quarter, which had a reading of 53.7.

Unemployment in the county recorded a 0.1% increase quarter-on-quarter and stood at 4.9%.

Chief economist at Grant Thornton Andrew Webb said the capital’s economy continued to show “impressive resilience”, with “solid private-sector growth and employment levels holding firm despite some sectoral headwinds”.

However, Mr Webb said challenges remained, particularly when it came to housing supply and FDI inflows, “which policymakers will need to address to sustain this positive momentum”.

Despite the growth recorded in the construction sector, housing commencements in Dublin between October and December contracted sharply, hitting a two-year low of 2,747 homes.

This reflected declines of 54.6% compared to the period July to September, and by 31.4% compared to the same period in 2023.

Completions of units also declined by 8.1% quarter-on-quarter, as the number of new units entering Dublin’s housing stock fell to 3,548 over the three months.

FDI contracted in Dublin again towards the end of 2024, with average capital investment declining 14.3% to $735m (€680.5m) compared to the previous quarter, but up by 4.4% compared to the end of 2023.

According to the report, Dublin compared favourably to its European counterparts for FDI per capita at $639 and had an average project value of $27m-$2m more than London, which ranked second for this metric.

The economic monitor is produced by Grant Thornton on behalf of the four local authorities in Dublin.