Dublin business activity ends 2025 'on a solid footing'

Foreign direct investment (FDI) into Dublin declined during the final quarter of 2025, down 30.2% year-on-year to €531m, a new low for the series

Spending data shows that retail expenditure in Dublin increased by 2.5% quarter-on-quarter and 7.9% year-on-year. File picture: Sam Boal/Collins

Business activity in Dublin remained solid during the final months of 2025, but signs of a cooling employment market as well as a “softer” foreign direct investment environment emerged.

According to the S&P Global Purchasing Managers’ Index (PMI) for Dublin, business activity in the capital increased solidly during the fourth quarter of last year, compared to the previous quarter, with a reading of 53.2, up from 50.8.

Any figure above 50 in the PMI denotes growth during the quarter.

The Dublin Economic Monitor is produced by Grant Thornton on behalf of the four Dublin local authorities.

Chief economist at Grant Thornton, Andrew Webb, said Dublin closed out 2025 “on a solid footing” as business activity “strengthened” while “consumer and tourism spending remain healthy, and housing completions have accelerated sharply”.

“However, the data also point to a gradual cooling in parts of the labour market and a softer foreign direct investment environment, highlighting a more balanced and sustainable phase of growth. 

"The challenge now is to convert this resilience into longer-term momentum by maintaining competitiveness, scaling up housing delivery and supporting investment in the years ahead.” 

Across the three sectors included in the monitor, only manufacturing recorded a contraction with a PMI reading of 49.4. This is the sector's first contraction in three quarters.

Housing completions

The services sector recorded a PMI reading of 55.5 with the construction reading hitting 55.1, recovering from 49.4 during the prior quarter.

The monitor said the delivery of homes regained some momentum towards the end of last year with the volume of completions rising 31.4% compared to the end of 2024 to 4,664 units. 

However, housing commencements were down year-on-year 21.3% to 2,162.

“For 2025 as a whole, almost 14,100 homes were completed, representing an 18.8% increase on 2024 and a boost for the overall housing stock in the capital,” the monitor said.

“In contrast, total commencements in 2025, 5,074 units, were substantially below the 20,712 units recorded in 2024, pointing to ongoing volatility in the development pipeline heading into 2026.” 

Employment, spending and FDI

Employment across the county saw a slight quarter-on-quarter decline of 0.7% between October and December to 838,000. However, year-on-year, employment is up by around 22,400 jobs.

The unemployment rate declined to 5.0%, a 0.2 percentage point decrease from Q3.

“The volume of Dublin job postings on the Indeed website steadied in early 2026 following the gradual easing seen through much of 2025,” the monitor said.

Spending data shows that retail expenditure in Dublin increased by 2.5% quarter-on-quarter and 7.9% year-on-year.

Discretionary spend rose by 2.7% over the quarter while spending on household goods increased by 2.4% and entertainment spend expanded by 3.1%.

Foreign direct investment into Dublin declined during the final quarter of 2025 down 30.2% year-on-year to €531m reaching a new low for the series.