The latest survey of Dublin's economy shows the rate of increase is in decline which could result in a "slow down" in the second half of the year.
The projections match the words of Finance Guru Eddie Hobbs who said a recession in early Autumn was "likely". There are also indicators that a global recession is on the way, such as the European Central Bank raising their interest rates for the first time in 11 years amid runaway global inflation.
The latest Dublin Economic Monitor survey, from S&P Global, shows that business activity in the second quarter continued to increase "but at the softest rate in a year". The survey is based on responses from 200 businesses.
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A reading of above 50 indicates growth while below that figure suggests a contraction. The headline rate remained "robust" at 56.0, but eased from 60.1 in Q1, as inflationary pressures constrained demand.
Activity increased across all three of the monitored sectors, but at sharply slower rates in the manufacturing and construction sectors. Output across the rest of Ireland remained broadly in line with the capital.
A Dublin City Council spokesperson said: "Business activity in Dublin and Ireland continued to increase in the second quarter of the year but slowdowns in growth rates are apparent as inflationary pressures take hold. Weakened demand driven by surges in inflation and economic uncertainty will play a significant role in the direction of business activity in the short to medium term.
"However, there is hope that price levels will begin to stabilise in the second half of the year as quantitative tightening measures are rolled out."
The spokesperson added: "The rise in new orders in Q2 was the softest in the current five-quarter sequence of growth. New business in the capital continued to record stronger growth than the rest of Ireland.
"While these consistent new order trends signal the potential for strong activity for the remainder of the year, inflationary pressures remain a significant threat for the coming quarters."
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On employment, the survey found: "the rate of job creation remained strong in Q2 as Dublin companies continued to rebuild workforce numbers following the pandemic. This marks the sixth successive quarter where companies in Dublin increased their staffing levels."
"Employment also increased across the Rest of Ireland, but at a slower rate than that seen in the capital.
Economics Director at S&P Global Andrew Harker warned "securing new business" and business expansion would become more difficult in the second half of 2022.
He said: “While the Dublin private sector remained comfortably inside growth territory in the second quarter of the year, there were signs of a slowdown as inflationary pressures bear down on demand. This will likely make securing new business and expanding output more difficult for firms over the second half of the year.
"The rate of job creation remained marked as companies continued to play catch-up from the pandemic, but again there will be concerns about whether this can be sustained should there be a wider economic slowdown.”
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