Growth slows in Dublin as services sector contracts

The services sector, which is the biggest sector in Dublin, saw a contraction during the third quarter for the first time since early 2021. File photo

Business activity in Dublin continued to slow between July and September with the services sector seeing a contraction for the first time since early 2021, the latest Purchasing Managers’ Index (PMI) from S&P Global shows.

The latest PMI reading stood at 50.8 for the third quarter marking a marginal expansion during that time but down from the 52.2 recorded during the second quarter. This is the weakest rate of growth for the capital since late 2022.

The overall PMI is based on the output/business activity question from each survey. An index reading above 50 indicates an overall expansion in activity, below 50 an overall contraction.

Business activity across the rest of the country also slowed, but at 51.4 growth remained slightly stronger.

The manufacturing sector in Dublin saw robust growth with a reading of 52.2 while the construction sector recorded a slight increase with a reading of 50.6, meaning both sectors reported an increase in output.

However, the services sector, which is the biggest sector in Dublin, dipped to 49.4, entering contraction territory for the first time since early 2021. New business activity returned to growth during the third quarter with new orders also rising.

Economics director at S&P Global Market Intelligence, Andrew Harker, said the Dublin private sector went through a “soft-patch during the third quarter of the year”, particularly in the service sector “where business activity actually dipped slightly”.

“More positively, however, new orders returned to growth and greater certainty around US tariff policies will hopefully enable companies to build going into the final quarter of the year. In fact, firms were confident enough to up their pace of hiring, with additional workers taken on at a solid clip in the third quarter,” he said.

Employment trends in Dublin remained positive with firms adding to their workforce. The Employment Index rose to 52.3, up from 51.3 in the second quarter, marking the fastest pace of job creation in a year.

The PMI is calculated using responses from around 200 businesses per month across the services, manufacturing and construction sectors.