Dublin economy ‘severely’ impacted by Covid restrictions

Business activity and employment in the capital continues to be “severely affected” by Covid restrictions, the latest Dublin Economic Monitor shows.

The report, compiled on behalf of the city’s four local authorities, said Level 5 restrictions had resulted in the closure of much of the Dublin economy, with businesses laying off massive numbers of employees.

Recipients of the pandemic unemployment payment (PUP) peaked at more than 480,000 nationally in February as businesses ranging from construction to retail and hospitality were partially or fully closed under the restrictions.

“The exact timeline for reopening after this damaging chapter of the pandemic is uncertain,” it said.

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“It is, however, likely to be dictated by the success or otherwise of phased returns to operations in specific sectors such as construction from April onwards,” it added.

The latest monitor reveals business activity in Dublin contracted in the final quarter of 2020 with the Markit purchasing managers’ index (PMI) for the city falling to 49.2, below the 50 mark that separates growth from contraction, on the back of a decline in new orders and employment.

The report also highlights that retail spending declined in the fourth quarter despite Christmas rush, falling 4.8 per cent quarter on quarter.

However, spending remained 1 per cent above the same quarter in 2019, primarily because of an increase in online spending, which rose by 44 per cent.

Discretionary items

Spending on discretionary items such as clothing and entertainment “plummeted”, down 47.2 per cent and 70.1 per cent respectively, however.

The report showed tourist numbers, crucial to the Dublin economy, fell by 19 per cent in the fourth quarter and were down 62 per cent on an annual basis.

It also revealed that occupancy rates at Dublin hotels slumped in January following a minor recovery at the end of 2020.

Hotel occupancy stood at just to 16.1 per cent in January, it said, as the average daily rate for a room declined to €88.

“With most hospitality and accommodation currently closed and tourism levels at historic lows, it will be summer and beyond before occupancy in the sector returns to sustainable levels,” the report said.

The latest monitor reveals that the capital’s job market continues to suffer under the weight of restrictions.

Employment levels among Dublin residents fell to below 692,000 in the fourth quarter of 2020 with the services and construction sectors the worst hit.

The construction sector recorded the deepest decline in employment levels with the total falling by 10.1 per cent (3,300 jobs) quarter on quarter.