DEM - November 2019

issue 19

November 2019

In this issue LATEST DUBLIN ECONOMIC DATA IHS MARKIT DUBLIN PMI MASTERCARD SPENDINGPULSE BREXIT AND SLOWING GLOBAL ECONOMY ARE KEY CHALLENGES FOR DUBLIN'S GROWTH

PAGE 12

PAGE 14

AIDAN SWEENEY Ibec SENIOR EXECUTIVE FOR GOVERNMENT, ENTERPRISE AND REGULATORY AFFAIRS

NIALL MACCARTHY DIRECTOR OF CORK AIRPORT daa

DUBLIN MUST RISE TO THE CHALLENGE

IMPACT OF BREXIT ON DUBLIN AIRPORT

WELCOME

HIGHLIGHTS Dublin’s unemployment rate remained unchanged at 4.4% in Q2 2019, the lowest rate since Q1 2005.

Dublin’s employment in Financial, Insurance and Real Estate Activities hit all-time highs in Q2, supported by Brexit relocations.

Dublin’s property prices eased further in August 2019 (-0.3% YoY), the lowest rate since October 2012.

On a monthly basis prices rose for the 4th consecutive month (+0.6%).

Dublin rents continue to rise strongly at +3.4% QoQ in Q2.

Housebuilding in Dublin contracted in Q2 2019 with both completions (-13.7%) and commencements (-18.5%) contracting annually. This is the first time since Q1 2015 that completions exceeded commencements.

Public Transport trips in Dublin reached 61 million in Q3 2019 (+8.8% YoY). The LUAS continues to grow its share of passengers (19.9%) and at 15.1%, YoY had the fastest growth rate.

The Mastercard SpendingPulse shows that Dublin retail sales growth was solid in Q3 (+4.7% YoY) driven

by Household Goods. Tourism spend is up 8.3% YoY but spending by UK and German visitors contracted.

The Dublin MARKIT PMI recorded its slowest pace of expansion since Q2 2013 following three consecutive quarters of deceleration. Despite this, at 53, it continues to indicate solid growth.

COVER IMAGE: DUBLIN AIRPORT

2 //

WELCOME TO THE NOVEMBER 2019 ISSUE OF THE DUBLIN ECONOMIC MONITOR

T

he Dublin Economic Monitor is a joint initiative on behalf of the four Dublin Local Authorities, and is designed to be of particular interest to those living and doing business in Dublin or considering locating here. It is produced by EYDKM Economic Advisory Services and IHS MARKIT deliver the Dublin Purchasing Managers' Index (PMI).

We also partner with Mastercard to use their SpendingPulse reports to better understand retail and tourism spending patterns. The SpendingPulse is derived from anonymised and aggregated card transaction data as well as other means of payments such as cash and cheques. This data helps the city develop new insights on the spending patterns of Dubliners and tourists, as well as comparing the Capital's performance to the whole of Dublin City Council

South Dublin County Council

Ireland (see centrefold supplement).

The special articles this quarter include one from Niall MacCarthy, Director of Cork Airport, daa, who outlines the measures that have been put in place at Dublin airport to minimise the impact of Brexit. The second article is written

by Aidan Sweeney, Senior Executive for Government, Enterprise & Regulatory Affairs, Ibec, who highlights the major challenges currently facing Dublin city.

These include not only Brexit related concerns but also wider issues like rising trade tensions globally and international tax reform. We hope you find the Monitor useful and welcome any feedback. You can sign up to our quarterly mailing list and access the Monitor resources online at www.dublineconomy.ie.

The next release will be published in February 2020.

Fingal County Council

Dún Laoghaire Rathdown County Council

This document provides general information on the Dublin economy. It is not intended to be used as a basis for any particular course of action or as a substitute for financial advice. The document is produced independently by EY-DKM Economic Advisory Services; the views and opinions expressed are those of the relevant author, and do not necessarily reflect the views of the Dublin Local Authorities.

The Dublin Local Authorities disclaim all liability in connection with any action that may be taken in reliance of this document, and for any error, deficiency, flaw or omission contained in it.

ECONOMY

GLOBAL ECONOMY

NATIONAL ECONOMY

The OECD Interim Economic Outlook September projections for 2019 indicate global growth forecasts were revised to 2.9%. This is a significant downgrade compared to the estimated 2019 figure of 3.5%, which was predicted in November 2018. Ongoing trade conflicts are the principal cause of this decline, which continues to hamper confidence, growth and job creation across the global economy.

The Irish economy grew by 5.8% in real GDP terms in Q2 2019 compared with Q2 2018. The Information & Communication sector made a hugely positive contribution to this figure, rising by 32.4%.

Budget 2020 was announced in early October and was based on the assumption of a disorderly Brexit, and the impact of such a scenario was assessed by the Department of Finance. GDP is estimated to be 3.8% lower compared to the ‘no Brexit’ case, while employment would be reduced by 2.1%. In the event that a deal is agreed upon, the impact on the Irish economy is forecast to be less severe. GDP is estimated to be reduced by 2%, while employment would fall by 1% compared to the ‘no Brexit’ scenario.

global economic policy uncertainty 360

320

gdp and export forecast under disorderly brexit 12

280

% YOY CHANGE

10

240

200

8 6 4 2

160

0

2019

2020

2021

GDP 120

2023

2024

Jun 19

Sep 19

Mar 19

Dec 18

Jun 18

Sep 18

Mar 18

Dec 17

Jun 17

Sep 17

Mar 17

Dec 16

Jun 16

Sep 16

Mar 16

Dec 15

Jun 15

Sep 15

source: Department of finance

Mar 15

80

2022

Exports

economic policy uncertainty 2019. note: the global epu index reflects the relative frequency of own-country newspaper articles that contain a trio of terms pertaining to the economy, policy and uncertainty.

UK ECONOMIC OUTLOOK The OECD’s UK growth forecast is based on the assumption that the UK reaches a deal with the EU and smoothly exits from the EU. In this best-case scenario, UK growth is expected to be lower by 1%. The quarterly survey released by the Confederation of British Industry revealed that optimism in the UK’s financial services sector had plunged at the most significant rate since September 2008, when Lehman Brothers collapsed. The sector accounts for 7% of British GDP, 9% of exports and 11% of all tax receipts, so any waver in confidence is likely to affect the wider economy.

global

3.6

2019 %f 2.9

irish macroeconomic growth forecasts 2019 %F

2020 %f

gnp

3.8%

3.5%

gdp

4.1%

3.3%

private consumption

2.7%

2.3%

3.0

public expenditure

5.5%

4.1%

7.1%

5.7%

major economies gdp growth forecasts 2018 %

The KBC Irish Consumer Sentiment Index revealed that confidence amongst consumers declined to a six year low in September 2019.

Amidst the uncertainty and extension of the Brexit deadline to 2020, Irish households have increased their level of savings, despite very low interest rates. Data released by the Central Bank of Ireland revealed that household deposits reached €653m in August 2019, which is an increase of €200m in comparison with the same period last year.

On a positive note, Foreign Direct Investment (FDI) in Ireland has increased significantly of late, according to the EY European Attractiveness Survey 2019. A total of 205 commitments were won

by Ireland in 2018, which is an increase of 52% in comparison with 2017.

2020 %f

uk

1.4

1.0

0.9

investment

us

2.9

2.4

2.0

exports

5.0%

4.7%

5.7%

5.4% 4.5%

euro area

1.9

1.1

1.0

imports

germany

1.5

0.5

0.6

unemployment rate

4.8%

japan

0.8

1.0

0.6

employment

2.8%

1.8%

china

6.6

6.1

5.7

modified final domestic demand

4.1%

3.6%

india

6.8

5.9

6.3

modified total domestic demand

3.8%

3.2%

source: oecd world economic outlook, sept 2019

sources: ey economic eye forecasts. f: forecast; based on an orderly Brexit

// 3

DUBLIN ECONOMY

BREXIT AND SLOWING GLOBAL ECONOMY ARE KEY CHALLENGES FOR DUBLIN’S GROWTH KPIs show the capital continues to face these challenges from a position of relative strength Uncertainty has been a feature of the Irish economy throughout 2019 with recent events increasing the lack of clarity for consumers and businesses alike. The impending Brexit deadline (now delayed to 31 January 2020) brought the potential negative consequences of a no-deal into sharper focus.

" The Dublin economy has held up reasonably well against a backdrop of widespread uncertainty and slower economic growth both in Europe and at the global level. Whether Dublin can maintain the current expansionary sequence remains to be seen given current levels of Brexit uncertainty and generally weaker demand conditions.

Nonetheless, the Dublin economy seems set to meet any future challenges from a position of relative strength."

Amritpal Virdee, Economist, IHS Markit

Budget 2020 was framed in the context of a no-deal Brexit sending a clear message to the UK Government of Ireland’s vulnerability to their approach on Brexit. The baseline scenario assumes that a disorderly Brexit will weight on economic activity in 2020 and could

4 //

see GDP growth slow considerably to 0.7%. While the threat of a no-deal Brexit has now subsided, on 10 October the Government made available €650 million to support the most vulnerable sectors – agriculture, enterprise and tourism.

The impact of Brexit uncertainty on the tourism sector, in particular, has been reflected in the Mastercard SpendingPulse data over recent quarters. In Q3 2019, tourism spend from the UK recorded its third consecutive quarter of YoY decline with spending contracting by 2.6%. On average more than 3.4 million British tourists holiday in Ireland every year, spending up to €1.6 billion, so exchange rate volatility has undoubtedly had an impact.

A recent survey conducted by Tourism Ireland found that UK tourists are curtailing their holiday plans on foot of Brexit uncertainty with 15% declaring they will take fewer short-trips outside of the UK in the next 12 months and half of those surveyed saying they will spend less while on holidays as a direct result of the weaker pound. Brexit is not only impacting UK tourism but is also weighing on the decisions of European tourists, namely Germans; with spend down 4.2% YoY in Q3 according to the SpendingPulse.

Earlier this year the Irish Tourism Industry Confederation (ITIC) reported that German tourists were adopting a “wait-and-see” approach before booking any Irish trips.

DUBLIN ECONOMY

Any reduction reduction to tourism numbers and spend could have significant consequences for employment in the sector. Budget 2020 established that a no-deal Brexit could lead to a 100,000 reduction in jobs across the economy – 10,000 in the tourism sector.

Not all sectors however are as vulnerable to the Brexit threat and a recent survey by Hays Recruitment found that 58% of Irish employers believe Brexit will actually make it easier to attract and recruit talent – a problem that has arisen for employers as the labour market continues to tighten. Dublin’s labour market is currently very strong with an unemployment rate of 4.4% and a workforce of 717,000. While the extent of any upside from Brexit (orderly or disorderly) should not be overstated, there is evidence that Dublin has benefited from the movement of financial services (FS) firms from London.

EY data confirms that Dublin has led the race in attracting firms from London after Brexit. A total of 29 FS companies have relocated staff or services from London to Dublin since the Brexit referendum in 2016. Luxembourg has attracted 25 and Frankfurt 24 FS firms. This, combined with the tightening labour market in Dublin, means that employers will need to explore new talent pools in order to fulfil demand.

Although a global slowdown may be a greater threat to the Dublin economy than Brexit, the city would not be immune to Brexit damage. The weakening of Irish growth and resulting need to provide support to rural Ireland could hamper spending in the city. In addition, Dublin’s position as a tourist gateway presents a further Brexit vulnerability.

Neil Gibson, Chief Economist, EY

Brexit and slowing global growth are not the only challenges facing the Dublin and national economy. Pressures in the housing and construction market, which has been a focus of the Dublin Economic Monitor over the past two years, continue to build.

Average monthly rents and house prices in Dublin remain at unsustainably high levels as we end 2019. While rent inflation has slowed marginally and house price inflation has turned negative this is more likely a reflection of affordability rather than any significant improvement on the supply-side of the market.

Indeed data presented in this report shows that supply-side issues in the market continue to have a negative impact. Annual growth in housing completions turned negative in Q3 2019 for the first time since 2015. Commencements also recorded negative growth in Q3, marking the first quarter since the start of 2015 that completions outstripped commencements.

While it is too early to identify a trend, any slowdown in momentum could have damaging consequences for the market particularly in light of the recent Property Industry Ireland1 report that established an average new household formation of 32,000 per annum between 2019 and 2051 (previous estimates of 25,000).

The challenges facing the Irish economy in the coming year are numerous – increasing trade tensions, a slowing Chinese economy and continuing uncertainty relating to the timing and form of Brexit. However key performance indicators for employment, public transport, airport trips and consumer and tourism spend, for example, indicate that Dublin will face these challenges from a relatively strong position.

SOURCE (1) https://www.propertyindustry.ie/Sectors/PII/PII.nsf/vPages/Publications~estimating-irelandslong-run-housing-demand---april-2019-05-04-2019!OpenDocument

// 5

DUBLIN ECONOMIC INDICATORS

DUBLIN ECONOMIC INDICATORS

employment in financial and retail services at all-time high services employment '000s (sa) year on year change '000s (sa) industry & constr, employment '000s (sa) year on year change '000s (sa)

q2 ' 19 629.1 20.7 80.3 2.2

source: cso lfs. seasonally adjusted by ey-dkm. note: this series has been re-calibrated since the last issue

Private Sector Services employment (excl. Construction and Industry) recorded growth of 3.2% YoY in Q2 2019, largely driven by YoY gains in Accommodation (+10.5%) and Financial, Insurance and Real Estate Activities (+8.4%).

Employment in these two sectors was at all-time highs in Q2, with growth in the latter anticipated to continue on foot of Brexit and the relocation of Financial Services companies to Dublin. Construction employment in Dublin is continuing on a broad upward trend registering YoY growth of 8.3% in Q2.

6 //

Dublin Max 13.7%

14% 12% 10% 8% 6% 4%

Dublin

Q2 19

Q4 18

Q2 18

Q4 17

Q2 17

Q4 16

Q2 16

Q4 15

Q2 15

Q4 14

Q2 14

Q4 13

Q2 13

Q4 12

Q2 12

0%

Q4 11

2%

Q2 11

Dublin’s unemployment rate remained at 4.4% in Q2 2019, unchanged from Q1 and representing the lowest rate since Q1 2005. The unemployment rate is now 9.3 percentage points lower than at its highpoint (13.7%) in Q3 2011. As of Q2 there are 716,700 people employed in the capital, with an additional 11,800 added to workforce since the first quarter of the year. Nationally, the unemployment rate is now 5.2%, relatively unchanged from Q1 (5.1%).

National Max 16%

16%

Q4 10

source: cso labour force survey (lfs). dublin seasonally adjusted by ey-dkm.

18%

Q2 10

dublin unemployment (sa) year on year change % points (sa) dublin employment '000s (sa) year on year change '000s (sa)

q2 ' 19 4.4% -0.9 717 +21.6

dublin & national unemployment rate % (sa)

Q4 09

15,300 added to the Dublin workforce in first half of 2019

National

source: cso lfs. dublin seasonally adjusted by ey-dkm.

employment by broad sector '000s (sa) 800

Max: 709,469

700 600 500 400 300 200 100 0

Q2 10

Q2 11

Q2 12

Q2 13

Private Sector Services

Q2 14

Q2 15

Public sector

Q2 16

Q2 17

Q2 18

Industry

source: cso. seasonally adjusted by ey-dkm note: individual sector values may not sum to total due to rounding

Q2 19

Construction

DUBLIN ECONOMIC INDICATORS Dublin property prices rise for the sixth consecutive month

source: cso.

Dublin Max 107.7

110 100 90 80 70

Aug 19

Feb 19

Aug 18

Feb 18

Aug 17

Feb 17

Feb 16

Aug 16

Feb 15

Dublin

Aug 15

Feb 14

Aug 14

Feb 13

Aug 13

Feb 12

Aug 12

Aug 11

Feb 11

40

National excl. Dublin

source: cso.

residential rents € €1,750

Dublin Max: €1,713

€1,650 €1,550 €1,450 €1,350

source: rtb.

€1,250

Dublin rents continued on an upward trend in Q2 2019 with an annual increase of €114 in the average rent (+7.1%). Average Dublin rents now stand at €1,713, the highest level recorded in the capital since the series began in mid-2007. Average rents in the GDA (excl. Dublin) also recorded strong growth in Q2 2019, increasing 6.8% YoY. Though the rate of growth has tapered since 2014/2015, average rents across the country are now at all-time highs.

€1,150 €1,050 €950 €850 €750

Dublin

Greater Dublin Area (excl. Dublin)

Q2 19

Q4 18

Q2 18

Q4 17

Q2 17

Q4 16

Q2 16

Q4 15

Q2 15

Q4 14

Q2 14

Q4 13

Q2 13

Q4 12

Q2 12

€550

Q4 11

€650 Q2 11

q2 ' 19 1,713 +114

50

Q4 10

dublin rents increase 3.4% qoq in q2 2019

60

Aug 10

Annually, Dublin property price inflation has been moderating since May 2018 and entered negative territory in July 2019 (-0.1%), easing further in August 2019 (-0.3%), the lowest YoY growth rate since October 2012. However, Dublin property prices have been growing on a monthly basis, with a positive growth rate for the fourth consecutive month in August 2019 (+0.6%). Outside Dublin prices continue to rise, although the rate of growth (YoY) indicates a continuous deceleration, as has been the case for the past 14 months.

dublin avg residential rent € per month year on year change €

120

Q2 10

property price index dublin year on year % change property price index national excl dublin year on year % change

aug ' 19 106.3 -0.3 103.1 +4.4

residential property price index (2005 = 100)

Outside GDA

source: rtb. note: gda (ex dublin) is kildare, meath and wicklow.

housing completions contract YoY for first time since 2015 total house commencements year on year change total house completions year on year change

q2 ' 19 1,589 -361 1,628 -259

dublin housing commencements & completions 2,400

Commencements Max: 2,240

2,000

Completions Max: 1,870

1,600

1,200

source: dhplg, cso note: house commencement data is not seasonally adjusted

800

Completions

Q2 19

Q4 18

Q2 18

Q4 17

Q2 17

Q4 16

Q2 16

Q4 15

Q2 15

Q4 14

Q2 14

Q4 13

Q2 13

Q4 12

Q2 12

0

Q4 11

400

Q2 11

Housebuilding in Dublin contracted in Q2 2019 with completions and commencements recording negative annual growth of -13.7% and -18.5% respectively. This marks the first quarter of negative YoY growth in completions since Q2 2015.

Commencements also recorded a sharp drop in Q2 YoY. This may have negative implications in the future for completions growth.

Commencements

source: dhplg.

// 7

DUBLIN ECONOMIC INDICATORS stagnation in dublin office rent growth in q3 2019

130

q3 '19 118.2 0.0 118.0 +3.5

City Centre Max = 118 South Suburbs Max = 118

120 110 100 90 80

dublin suburbs office vacancies at record low in q3 2019

70 60

City Centre

Q3 19

Q1 19

Q3 18

Q1 18

Q3 17

Q1 17

Q3 16

Q1 16

Q3 15

Q1 15

Q3 14

Q1 14

Q3 13

Q1 13

Q3 12

Q1 12

Q3 11

40

Q1 11

50

Q3 10

The index of office rents in Dublin City Centre remains unchanged in both QoQ and YoY growth terms for the seventh and fourth consecutive quarter, respectively. Office rents in Dublin’s South Suburbs also registered 0.0% QoQ growth in Q3 2019, while growth of 3.5% YoY was recorded. Rents are at their highest level since the series began in 2006. Both the City Centre and Dublin’s South Suburbs may be becoming saturated, and demand is now starting to spread elsewhere.

Q1 10

source: CBRE

Q3 09

city centre office rent index year on year % change south suburbS office rent index year on year % change

dublin office rents index (2006 = 100)

South Suburbs

source: cbre.

dublin office space vacancy rates % 30% Dublin Suburbs Max = 25%

vacancy rate % dublin 2/4 year on year change % points vacancy rate % dublin suburbs year on year change % points

q3 '19 4.4 -0.2 5.9 -2.1

Dublin 2/4 Max = 20.6%

25%

20%

15%

source: cbre.

10%

Dublin 2/4

Q3 19

Q1 19

Q3 18

Q1 18

Q3 17

Q1 17

Q3 16

Q1 16

Q3 15

Q1 15

Q3 14

Q1 14

Q3 13

Q1 13

Q3 12

Q1 12

Q3 11

Q1 11

Q3 10

0%

Q1 10

5%

Q3 09

Office vacancy rates in Dublin’s suburbs stood at 5.9% in Q3 2019, 2.1 percentage points lower than Q3 2018. This is the lowest level recorded since the series began in 2007. Financial services occupiers accounted for the largest proportion of leasing activity in the quarter at 58%. In the city centre, office vacancy in Dublin 2/4 stood at 4.4% in Q3 2019, 1.1 percentage points lower than the previous quarter.

Dublin Suburbs

source: cbre.

quarterly passenger numbers surpass 60 million public transport million trips (sa) year on year change million trips (sa)

q3 '19 61.0 +4.9

public transport million trips (sa) 70

60

50

source: nta. seasonally adjusted by ey-dkm.

A total of 61 million public transport trips took place in Dublin in Q3 2019 (+8.8% YoY). The LUAS was the greatest contributor to overall growth, with 15.1% YoY growth recorded. LUAS now accounts for 19.9% of total passenger numbers, compared to 18.8% in Q3 2018. Dublin City Bus maintains the greatest share of overall passenger numbers (63.7%), while the share of Irish Rail passengers has fallen for the fourth quarter and now stands at 14.7%. The number of passengers using Bus Éireann has remained unchanged throughout 2019, at 1.6 million per quarter.

40

30

20

10

0

Q1 17

Q2 17

Q3 17

Bus Éireann

Q4 17

Q1 18

Q2 18

Dublin City Bus

source: nta. seasonally adjusted by ey-dkm

8 //

Q3 18

Q4 18

Q1 19

Irish Rail

Q2 19

Luas

Q3 19

N ove m b e r 2 0 1 9

DUBLIN Mastercard SpendingPulse

TM

Dublin Mastercard SpendingPulse Delivering Unique Insights for Consumer and Tourism Spend.

KEY HIGHLIGHTS YEAR-ON-YEAR Q3 2019*

+4.7%

+8.3%

OVERALL SALES

+4.0% NECESSITIES

OVERSEAS TOURISM SPEND

+2.3% DISCRETIONARY

+9.2% HOUSEHOLD GOODS

+5.1% ECOMMERCE

+3.5% ENTERTAINMENT

*RETAIL SALES VALUE (SA)

TM

DUBLIN Mastercard SpendingPulse

| November 2019

SOLID RETAIL SALES GROWTH IN DUBLIN DIVERGES FROM WEAKER PERFORMANCE NATIONALLY TOTAL RETAIL SALES INDEX (SA)

126

130

+4.7% YoY

125 120

120

115

+2.5% YoY

110 105

DUBLIN

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

Q3 14

Q2 14

Q1 14

100

IRELAND

Consumer spending in the Dublin economy grew by 4.7% (SA*) YoY in the third quarter of 2019. Growth in retail spend in Dublin continues to exceed the National (incl.

Dublin) level, which recorded a YoY increase of 2.5%.

Regarding annualised changes, this quarter has seen further divergence in spending growth between Dublin and nationally.

Overall retail sales growth in Dublin continued a

On a quarterly basis, consumer spending in Dublin grew by 0.6% QoQ in Q3 2019. This follows 2.3% QoQ growth in the second quarter, and a slight contraction (-0.1%) in Q1. Nationally, the pace of QoQ growth in retail slowed down significantly, from 1.0% to 0.1%. Again, the Dublin vs National divergence is marked.

to offset some of that weakness in Dublin.

solid 2019 in Q3 while spending across the rest of Ireland decelerated. Tourism spending from other markets in Europe remain slow in Q3 2019 however USA tourist spending is helping

Michael McNamara

GLOBAL HEAD OF SPENDING PULSE, MASTERCARD

DUBLIN RETAIL SALES VALUE INDEX (SA)

+4.7%

125.5

+0.6%

YoY GROWTH IN DUBLIN SALES INDEX

DUBLIN SALES INDEX VALUE

QoQ GROWTH IN DUBLIN SALES INDEX

Q3 2019

100 = Q1 2014

Q3 2019

METHODOLOGY A macro-economic indicator, SpendingPulse™ reports on national and Dublin retail sales and is based on aggregate sales activity in the Mastercard payments network, coupled with estimates for all other payment forms, including cash and cheque. This information has been grossed up to present an estimate of the total retail sales of retail businesses in Ireland and Dublin to both residents and tourists. Data is seasonally adjusted but is not adjusted for inflation. Mastercard SpendingPulse™ does not represent Mastercard financial performance. SpendingPulse™ is provided by Mastercard Advisors, the professional services arm of Mastercard International Incorporated. See www.dublineconomy.ie for more info on methodology.

2

*All values are Seasonally Adjusted by EY-DKM

TM

DUBLIN Mastercard SpendingPulse

METHOD: ECOMMERCE

SPENDINGPULSE: SELECTED SUBSECTORS

182.5

200

+5.1% YoY

190 180 170 160

178.8

150

+10.4% YoY

140

| November 2019

130 120 110

Dublin consumer spending growth was driven by YoY increases in all four consumption categories, most notably Household Goods (+9.2%). Dublin eCommerce sales growth remains strong, with an increase of 5.1% YoY; this however marks a moderation from the Q2 YoY growth of +9.2%, resulting in a QoQ fall of -2.1%. At a National level, YoY growth was driven by all consumption headings save Discretionary Sales. Annual growth was strongest in Household Goods Sales (+4.7%).

100

IRELAND

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

Q3 14

Q2 14

Q1 14

90

DUBLIN

Non store Retailers including Electronic Shopping and Mail-Order Houses, Direct Selling Establishments.

RETAIL CATEGORY: DISCRETIONARY 135

RETAIL CATEGORY: NECESSITIES 130

126

+2.3% YoY

130

125.1 +4.0% YoY

125

125

120

120 115 115

DUBLIN

IRELAND

Discretionary Retail: Department Stores and Clothing Stores.

Q3 19

Q2 19

DUBLIN

Grocery: all food and beverage stores.

RETAIL CATEGORY: HOUSEHOLD GOODS

RETAIL CATEGORY: ENTERTAINMENT 170

180

150.4

160

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

Q3 14

Q2 14

Q1 14

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

95

Q3 14

95 Q2 14

100

Q1 14

100

IRELAND

+3.5% YoY

105

Q1 19

-0.3% YoY

105

116.5

110

115.7

110

+3.5% YoY

150

163.5 +9.2% YoY

170 160 150

140

140 130

136.4

120

+2.0% YoY

110

146.5

130

+4.7% YoY

120

IRELAND

Hotels, restaurants and bars.

*All values are Seasonally Adjusted by EY-DKM

DUBLIN

IRELAND

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

Q3 14

Q1 14

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

90 Q3 14

90 Q2 14

100

Q1 14

100

Q2 14

110

DUBLIN

Household furniture, electronics and hardware.

3

TM

DUBLIN Mastercard SpendingPulse

| November 2019

BREXIT RELATED WEAKNESS IN UK & GERMAN SPENDING OFFSET BY US AND CHINESE TOURISTS Total tourism spend in Dublin registered YoY growth of 8.3%* in Q3 2019, although the rate of growth has moderated from 14.4% a year ago. Dublin growth was positively influenced by spending from American (+13.7% YoY) and Chinese (+6.1% YoY) tourists.

UK tourist spending in Dublin contracted for the third consecutive quarter in Q3. This decrease is particularly noteworthy as the UK is historically Ireland’s largest tourist market. Exchange rate volatility and inflation mean that UK holidaymakers have reduced disposable income. A recent report by Barclay’s Bank (2019) indicates 31% of respondents plan to spend more holiday time at home in the UK in 2019 than in previous years, with 20% citing affordability as their main reason for staying

home. Furthermore, a recent Tourism Ireland study has found that 10-20% of UK tourists are considering postponing foreign trips, including those to Ireland, as they reassess household expenditure in light of Brexit. The CEO of Tourism Ireland has called uncertainty the most pressing issue for the sector. From a national perspective tourist spend increased 4.4% YoY. The USA and China have shown consecutive years of buoyant spending growth; with YoY growth in USA tourism spend averaging 16.5% between Q1 2015 and Q3 2019. The tourism sector was provided with a contingency fund of €40 million to shield it from Brexit-related shocks in Budget 2020. However, it is hoped that, new opportunities - such as emerging markets - as well as marketing Ireland both domestically and internationally will negate the need for this safety net.

DUBLIN AND IRELAND TOURIST SPEND BY ORIGIN - Q3 2019 (SA) OVERALL

+4.4% +8.3% YOY OVERALL INCREASE IN TOURSIM SPEND IN IRELAND

YOY OVERALL INCREASE IN TOURSIM SPEND IN DUBLIN

+13.5% +13.7%

-1.8% +0.9%

+6.8% +6.1%

YOY CHANGE IN SPENDING IN IRELAND

+4.6% -4.2% YOY CHANGE IN SPENDING IN IRELAND

-1.6% -2.6%

YOY CHANGE IN SPENDING IN IRELAND

YOY CHANGE IN SPENDING IN DUBLIN

IRELAND

IRELAND TOURISM SPEND SALES INDEX (SA) Q1 2014 = 100

220

YOY CHANGE IN SPENDING IN DUBLIN

YOY CHANGE IN SPENDING IN DUBLIN

YOY CHANGE IN SPENDING IN DUBLIN

YOY CHANGE IN SPENDING IN IRELAND

YOY CHANGE IN SPENDING IN DUBLIN

DUBLIN

DUBLIN TOURISM SPEND SALES INDEX (SA) Q1 2014 = 100

240 230

210

220

200

210

190

169.7

180

183

200 190

170

180

160

170

150

160 150

140

140

130

130

120

120

110 100

YOY CHANGE IN SPENDING IN IRELAND

110 All

UK

USA

Germany

France

China

100

All

UK

USA

Germany

France

Q3 2016

Q3 2017

Q3 2016

Q3 2017

Q3 2018

Q3 2019

Q3 2018

Q3 2019

China

(1) https://www.independent.ie/business/brexit/uncertainty-the-biggest-threat-to-irish-tourism-sector-gibbons-38579438.html

4

*All values are Seasonally Adjusted by EY-DKM

DUBLIN ECONOMIC INDICATORS dublin airport passengers at seven year high in q2 2019

dublin airport arrivals '000s (sa) 8,500 Max: 8.2m

source: cso.

7,500 7,000 6,500

5,500 5,000

index of hotel room supply (sa, july 2013=100)

year on year change %

Max: 9.9 million tonnes

9 8 7 6 5 4 3 2

Total Tonnage

Imports

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

Q3 14

Q2 14

Q1 14

Q4 13

Q3 13

0

Q2 13

1

Exports

source: dublin port. seasonally adjusted by ey-dkm.

dublin hotel average daily rates (sa) €150

115

Maximum: €146

€140

110

€130

105 €120

source: str global. seasonally adjusted by ey-dkm.

100 €110

95

Average Daily Rate €

Sep 19

Aug 19

Jul 19

Jun 19

Apr 19

May 19

Mar 19

Jan 19

Feb 19

Dec 18

Nov 18

Oct 18

Sep 18

Aug 18

Jul 18

Jun 18

May 18

Apr 18

Mar 18

Jan 18

Feb 18

€90

Dec 17

€100

Nov 17

The Average Daily Rate (ADR) of hotel rooms decreased by 0.4% YoY in September 2019. At €141 the ADR is now 2.9% lower than at the peak in August 2018 (€146). In the past 12 months the number of hotel rooms in the Dublin market expanded by 1,100 with the supply index at 111.9 in September 2019 (Base=July 2013), up 4.9% YoY.

Q2 19

Q4 18

Q2 18

Q4 17

Q2 17

Q4 16

Q2 16

Q4 15

Q2 15

Q4 14

Q2 14

10

Throughput at Dublin Port has been displaying increased volatility, on a quarterly basis, over the past 18 months. In Q2 2019, total throughput declined by 3.9% QoQ, following similar declines in three of the previous five quarters. On an annual basis Q2 2019 saw the first YoY decline in throughout at the port since Q1 2013. This comes on foot of declines in both exports (-3.9%) and imports (-0.6%) in the second quarter of the year.

sep '19 83.1% -0.2 111.9 4.9%

Q4 13

dublin port tonnage million tonnes (sa)

source: dublin port. seasonally adjusted by ey-dkm. note: imports and exports may not add to total throughput due to seasonal adjustment and rounding.

hotel occupancy rate % (sa) year on year change %age point

Q2 13

source: cso.

q2 ' 19 3.81 -0.15 5.67 -0.04

over 1,000 hotel rooms added to dublin market in 12 months

Q4 12

4,000

Q2 12

4,500

Q1 13

first yoy decline in throughput at dublin port since q1 2013

6,000

Q4 12

A record number of 8.2 million passengers passed through Dublin Airport in Q2 2019. Although YoY growth slowed to 2.6% in Q2 2019, compared to 10% in Q2 2018, Dublin clearly remains a global hub for air travel. Total passenger numbers have been on a strong upward trend over the last seven years, and this is likely to increase further with DAA’s planned expenditure on additional infrastructure as well as the construction of the planned new runway costing €320 million.

dublin port exports million tonnes (sa) yoy change million tonnes (sa) dublin port imports million tonnes (sa) yoy change million tonnes (sa)

8,000

Q3 12

total passengers '000s (sa) year on year change '000s (sa)

q2 2019 8,228 210

90

Index of Supply

source: str global. seasonally adjusted by ey-dkm.

// 9

DUBLIN IHS MARKIT PMI business activity rises at slowest pace since q2 2013

overall ihs markit pmi (sa) 65

dublin

national excl. dublin

60

q3 2019

53.0

52.0

55

year on year change

-4.3 -1.3

-6.2 -2.6

50

overall ihs markit pmi

quarter on quarter change

increasing rate of growth ▲

50 = no change

45

35 30

65 60

q3 2019

51.8

51.9

55

year on year change

-4.9 -2.5

-7.9 -2.3

Q3 19

Q3 18

Q3 17

Q3 16

Q3 15

Q3 14

40 35 30

Q3 19

Q3 18

Q3 17

Q3 16

Q3 15

Q3 14

Q3 13

Q3 12

Q3 11

Q3 10

Q3 09

Q3 08

Q3 07

Q3 06

Q3 05

increasing rate of contraction ▼

Q3 04

25

National excl. Dublin

overall pmi employment growth (sa) 65

national excl. dublin

60

q3 2019

52.2

52.8

55

year on year change

-6.5 -0.5

-3.1 -1.6

50

quarter on quarter change

Q3 13

45

dublin

employment growth

Q3 12

50

Dublin

job creation weakest since q2 2013

Q3 11

Q3 10

Q3 09

Q3 08

Q3 07

Q3 05

Q3 04

Q3 03

Q3 06

increasing rate of growth ▲

50 = no change

Q3 03

As was the case with output, the rate of new order growth in Dublin softened from Q2. This is the second consecutive quarterly easing, with the latest increase the slowest in the current seven-year sequence of expansion. The rise in new orders in Dublin was broadly in line with that seen across the rest of Ireland.

National excl. Dublin

overall pmi new orders (sa)

national excl. dublin

quarter on quarter change

Q3 02

Dublin

dublin

new orders

increasing rate of contraction ▼

Q3 01

25

Q3 02

new order growth slowest in seven years

40

Q3 01

While the latest Dublin PMI data signalled a solid increase in output in Q3 2019, at 53.0, it pointed to the slowest expansion since Q2 2013. The rise in output in Dublin was stronger than across the Rest of Ireland, where the rate of growth also eased.

The performance of the 3 sectors continued to diverge. The strongest increase was seen at construction firms, though the rate of expansion slowed from Q2. Similarly, the rate of growth in services, though solid, eased from Q2. Reflecting global trends, manufacturing was the weakest performer, seeing a 3rd consecutive quarterly contraction in output.

increasing rate of growth ▲

50 = no change

45 40 35 30

Dublin

about The Dublin Purchasing Managers’ Index® (PMI) series is produced by IHS Markit Economics, an independent research company that produces highly-regarded surveys of business conditions in nations around the world www.markit.com

National excl. Dublin

Q3 19

Q3 18

Q3 17

Q3 16

Q3 15

Q3 14

Q3 13

Q3 12

Q3 11

Q3 10

Q3 09

Q3 08

Q3 07

Q3 06

Q3 05

Q3 04

Q3 03

increasing rate of contraction ▼

Q3 02

25

Q3 01

In line with the trend in business activity, employment among companies in Dublin has now increased on a quarterly basis since Q4 2012. The third quarter signalled a modest rise in staffing levels, with the rate of job creation easing to the slowest since the second quarter of 2013. Jobs growth in Dublin was outpaced by that seen across the Rest of Ireland, but there too the pace of increase softened.

DUBLIN’S INTERNATIONAL RANKINGS

DUBLIN RANKS IN TOP 5 FINTECH LOCATIONS OF THE FUTURE Internationally published benchmarks are a useful means of measuring a city’s performance relative to its peers, and recent indicators for Dublin confirm the city’s strong showing across a range of dimensions (see table below).

The Mercer Quality of Living report ranks 231 international cities based on the factors such as recreation, housing, access to public services etc. There was a slight improvement in Dublin’s ranking in the 2019 survey, moving up one position to 33rd, compared to 2018. The cost of living in Dublin continues to rise with the city now ranks 43rd in the Mercer Cost of Living Index. Research carried out by Deutsche Bank highlights this, as Dublin ranked 2nd out of 56 global cities in terms of the cost of one month’s Internet usage (8 Mbps).

Notwithstanding this Dublin holds first position in terms of potential relocations post Brexit, as measured by EY’s latest Financial Services Brexit Tracker.

Dublin ranks 9th in the European Regional Economic Growth Index, a fall of three places since the previous listing. As this

index is based on medium term economic growth prospects, uncertainty surrounding Brexit may be a contributing factor in this decline. The city ranks 5th in the inaugural Fintech Locations of the Future 2019/2020 benchmark by fDi. This reflects Dublin’s strong FDI performance (4th position) and Innovation & Attractiveness rankings (6th position). Further, the Global Financial Centres Index 2019 ranks Dublin 38th out of 104 international cities. This index incorporates many factors including economic, legal, sustainability and competitiveness. Dublin also features in the ‘Top 15 Centres likely to become more significant’.

The IESE Cities in Motion Index ranks Dublin in 37th position out of 174 cities. This index is based on a broad range of indicators including the economy, human capital, international outreach, urban planning, the environment and social cohesion. Delving further into the environmental ranking of Dublin, the city fares reasonably well in terms of pollution (Numbeo Pollution Index), ranking 210th out of 288, in terms of the most polluted cities.

The ranking of Irish third-level institutions has been on a downward trend of late, and this continues as Trinity College Dublin (TCD) dropped 44 places to 164th in the 2020 Times Higher Education listings.

Royal College of Surgeons (RCSI) and University College Dublin (UCD) both lie within the 201 - 250th category. Further down the list, Dublin City University (DCU) ranks in the 601-800th category, while Technological University Dublin (formerly Dublin Institute of Technology) ranks within the 801-1000th section.

This marks a considerable disimprovement in Ireland’s rankings over the past four years - TCD ranked 71 in the QS World University Rankings when the first Dublin Economic Monitor was published in April 2015. On a more positive note, Dublin performs favourably in the QS Best Student Cities – ranking 37th out of 120 international university cities.

This index takes into account a broader range of indicators, including student mix, desirability, affordability, and employer activity.

D U B L I N ' S L AT E S T I N T E R N AT I O N A L R A N K I N G S SOURCE

BENCHMARK CRITERIA

YEAR

RANKING

CHANGE‡

Mercer Quality of Living City Ranking

Environmental / socio - economic

2019

33

Mercer Cost of Living City Ranking

Cost of consumer goods and services

2019

43

European Regional Economic Growth Index

Medium-term economic growth prospects

2019

9

▲ ▼ ▼

IESE Cities in Motion Index

Human capital, social cohesion, the economy, governance, the environment, mobility & transportation, urban planning, international outreach and technology.

2019

37

▼

Deutsche Bank Mapping the World’s Prices 2019

Monthly cost of Internet (8 Mbps)

2019

2

EY Financial Services Brexit Tracker

Financial services considering or confirmed relocation

2019

1

2019

38

▲ -

2019

35

▼

2019

5

-

2019

210

-

2019

1

▼ -

Includes economic, legal, sustainability and competitiveness indicators Regulatory, market and business/labour landscape, Global Talent Competitiveness Index external and internal openness, education and access to growth opportunities and, sustainability and lifestyle FDI performance, connectivity, cost effectiveness, fDi Fintech Locations of the Future 2019/2020 economic potential, innovation & attractiveness Air quality, drinking water quality, noise & light Numbeo Pollution Index pollution, water pollution International Monetary Fund Global Financial Stability Average annual real house price growth in selected Report April 2019 economies and cities Global Financial Centres Index

The Global University Rankings

University quality

2020

164*

QS Best Student Cities

University rankings, student mix, desirability, employer activity, affordability, student view

2019

37

WorldFirst European Buy-to-Let League

Property and rental prices

2018

1

*TCD. ‡change on previous publication of the relevant benchmark. an upward-pointing arrow denotes an improvement.

// 11

COMPETITIVENESS STRATEGIES

DUBLIN MUST RISE TO THE CHALLENGE

BY AIDAN SWEENEY

Ibec SENIOR EXECUTIVE FOR GOVERNMENT, ENTERPRISE AND REGULATORY AFFAIRS

Dublin’s economy is at a critical juncture. Growth is strong but Brexit is posing a unique and significant challenge to the region. There are of course major uncertainties regarding the future EU-UK relationship. However, Brexit is just one of the external threats facing Dublin. Now is the time for action to make the metropolitan region more resilient and globally competitive First, Brexit was always an exercise in damage limitation. An orderly exit of the UK from the EU would avoid a profoundly disruptive nodeal cliff edge. The new deal agreed in October goes some distance toward mitigating the potential risks to the all-island economy and supply chains, but we will inevitably end up in a worse place than where we are now.

Dublin’s four local authority areas are, as expected, among the areas least exposed to a no-deal Brexit. The region’s diversified enterprise is the primary factor insulating its direct exposure to Brexit. The most exposed sectors are concentrated in the most economically disadvantaged parts of the country. In the short-tomedium term, this could threaten Project Ireland’s stated ambition to re-balance growth away from the Dublin metropolitan area, with the potential for overheating the remainder of Dublin’s economy.

Approximately 6.2% of total employment across Dublin City, Fingal, South Dublin and Dún Laoghaire-Rathdown is in the

12 //

sectors most exposed to Brexit. In nominal terms, Dublin City has the second highest number of jobs in the exposed sectors, at 14,000 but is still less than 6% of employment in the local economy. The tourism and hospitality sector in Dublin is particularly exposed to Brexit, with exchange-rate pressures already impacting visitor numbers from the UK. Dublin’s economy will continue to grow through a period of great uncertainty. Its economy is close to full employment, with moderate inflation and the strongest increases in real living standards since the late 1990s. Dublin will increasingly need to lobby at national and European levels for policy supports and investment in a post-Brexit world. We urgently require infrastructure upgrades and housing in order to compete for companies relocating from the UK but also to address our current constraints.

Global connectivity will of course present issues for Dublin due to Brexit. This has implications for air, sea, road and rail access.

HOUSEHOLD INCOMES AND EMPLOYMENT IN BREXIT EXPOSED SECTORS, BY COUNTY % OF WORKERS IN BREXIT EXPOSED SECTORS

30%

1. Carlow 2. Cavan 3. Clare 4. Cork City 5. Cork County 6. Donegal 7. Dublin City 8. Dún Laoghaire – Rathdown 9. Fingal 10. Galway City

2

28%

22

26% 24% 22%

12

18

20% 18%

6

20

16

27 30

14 24

16%

25

14%

1

23

28

3 17 29

15

5 11

22. Monaghan 23. Offaly 24. Roscommon 25. Sligo 26. South Dublin 27. Tipperary 28. Waterford 29. Westmeath 30. Wexford 31. Wicklow

21

19

12%

11. Galway County 12. Kerry 13. Kildare 14. Kilkenny 15. Laois 16. Leitrim 17. Limerick 18. Longford 19. Louth 20. Mayo 21. Meath

31

13

10% 8%

9

10

4

6%

26

7

4%

8

2% 0% €30,000

€32,000

€34,000

€36,000

€38,000

€40,000

€42,000

€44,000

€46,000

€48,000

€50,000

€52,000

€54,000

€56,000

€58,000

€60,000

€62,000

€64,000

€66,000

€68,000

€70,000

HOUSEHOLD MEDIAN GROSS INCOMES, € SOURCE: Ibec ECONOMIC QUARTERLY Q3 2018.

Planning has been ongoing over the past three years to reduce potential disruption to travel, trade and supply-chains. Our port and airport are assets of strategic national infrastructure, underpinning regional development. We need to ensure they can continue to grow and maintain global accessibility for the region.

Additionally, there is the unique challenge in terms of maintaining non-physical connectivity post-Brexit. This includes continuing efforts to prioritise the Dublin-Belfast economic corridor. Dublin’s economy is strongly rooted in global services. Brexit throws up new challenges to be addressed. For example, a no-deal Brexit would create a range of new barriers to the transfer of data between the EU and UK. This will be complicated further by the treatment of services in any future EU-UK trading arrangement.

Brexit is but one external threat to Ireland’s, and by extension Dublin’s economy. Rising trade tensions place specific pressures on small, open economies. The global economy is also close to the top of the business cycle. These factors are now cutting through to the real economy in Europe, with a slowdown in growth across Europe predicted in 2020. This is also likely to be the case for Dublin.

That’s not all. Impending international tax reform is likely to cause the biggest change in over a century in terms of how companies are taxed globally. Ireland will have to adapt, rethink and reimagine our business model. Dublin’s ability to attract skills and investment will become even more intertwined with our future economic success. Consequently, Dublin must become more competitive, resilient, and inclusive.

Talent is mobile. It is not just businesses that invest in Dublin, people do too. We must recognise that urban planning necessitates building communities, not just housing. The region’s distinct advantage as a global hub for education must be supported. All of this impacts a city’s ability to attract or retain people. However, this is an area of underperformance in recent years. In 2010, for example, Dublin was ranked as the 26th most liveable city in the world. Today, Dublin is 33rd. This represents a failure of spatial planning to connect the quality of life and place better.

There is no doubt that Dublin will have to work harder in terms of winning new investment. We must also grow our indigenous

enterprise base. Ireland is an easy place to start a business but a difficult country in which to grow one. Dublin must be a location of choice for entrepreneurs. The four local authorities have a key role to play in the future economic development.

Climate change is the single greatest challenge humankind faces today. The scientific evidence is unequivocal. The country must take decisive action to decouple emissions and economic growth and build the foundations of a sustainable, competitive low carbon economy. The scale of this challenge can be daunting. It won’t be easy and difficult choices will have to be made. It will require substantial investment, the deployment of new technologies and big changes in everyday human behaviour.

It is a time of global uncertainty. There are challenges and opportunities in equal measure. Dublin must lead the way in terms of fundamentally and creatively rethinking how we grow our economy, plan future development and become more resilient.

Dublin’s ability to attract skills and investment will become even more intertwined with our future economic success.

Consequently, Dublin must become more competitive, resilient and inclusive.” // 13

SPECIAL REPORT

IMPACT OF BREXIT ON DUBLIN AIRPORT

NIALL MACCARTHY DIRECTOR OF CORK AIRPORT daa

daa has worked closely with a range of key government, operational and commercial stakeholders to ensure robust contingency measures will minimise any potential Brexit impact. daa is a global airport and travel retail group which operates in 13 countries. In Ireland, daa manages and operates the country’s key gateways at Dublin and Cork airports.

Dublin Airport welcomed 31.5 million passengers in 2018 and is uniquely exposed to Brexit in a European airport context, given the significant traffic flows which exist between Dublin and the UK. To put this in context, ACI Europe research, published in October 2018, shows that UK passenger traffic accounted for, on average, 12% of total traffic flows across EU 27 airports in 2017. UK traffic accounts for one third of Dublin Airport’s total traffic with more than 10.1 million passengers travelling to and from UK airports last year. daa has worked closely with Government Departments such as Transport, Tourism and Sport and Agriculture, key State bodies such as Revenue and Irish Naturalisation and Immigration Service, as well as its customer airlines and a range of other key operational and commercial partners to put in place robust contingency measures to effectively minimise any potential impacts resulting from Brexit.

If the UK leaves the EU without a deal, emergency regulations will come into force at EU level to protect air connectivity for passengers and freight between the EU and the UK.

A no-deal Brexit is not expected to have any impact on the passenger journey at Dublin Airport.

A no-deal Brexit is not expected to have any impact on the passenger journey at Dublin Airport.”

CUSTOMS CHECKS At Customs in the arrivals hall, Revenue has confirmed that all passengers arriving at Irish airports from UK destinations, including all Irish and EU passport-holders, will be required to use the green channel in a ‘no deal’ scenario - rather than the blue channel, as is the current arrangement. The Red channel should be used if a passenger needs to make a customs declaration.

Dublin Airport will have customer services staff on hand to help passengers and to deal with any queries or confusion that may arise during the transition period.

14 //

DEPARTING PASSENGERS There will be no changes or additional requirements for UK-bound passengers departing from Irish airports, as a result of a ‘no-deal’ Brexit. UK-bound passengers will continue to comply with all current security processes and requirements, with no change anticipated from existing processes. The Irish Government has confirmed that duty-free shopping will return on alcohol and tobacco products if the UK leaves the EU without a deal.

ARRIVING PASSENGERS On arrival at airport immigration, UK passport holders arriving at Irish airports are currently processed through the ‘EU/EEA/ CH’ channel. If the UK leaves the EU without a deal, the Irish Naturalisation and Immigration Service (INIS) has confirmed that UK passport holders will continue to be processed through the ‘EU/ EEA/CH’ channel – however, this ‘EU/EEA/CH’ channel will be re-designated as an ‘EU/EEA/CH and UK’ channel.

There will be no additional immigration checks applied to UK passport holders at Irish airports.

ECONOMIC SCORECARD

DUBLIN: ECONOMIC SCORECARD NOV 2019 Note: These "petrol gauge" charts present the performance of the particular indicator relative to a range of performances from most positive (green) to least positive (red). Each gauge presents the latest value compared to the peak value and the trough value over the last decade (except for public transport trips which cover the past 5 years and housing completions which cover the past 6 years). The Commercial Property gauges are red at the high and low extremes, in recognition of the undesirability of rents that are either too high or too low as well as vacancy rates.

economy ihs markit business pmi q3 2019

52

unemployment rate q2 2019

56

48

8 59

53

44

mastercard spendingpulse sales index q3 2019

111

10

6

12

4.4

63

3 month moving average (sa)

116

106

121

126

101

14

% (sa)

126

index (2014 = 100) (SA)

transport airport arrivals q2 2019

6,120

6,820

5,420

4,715

seaport cargo q2 2019

7.9 7,530

8,228

8.5

7.2

9.5

53.2

49.4 9.2

6.5

000's/quarter (SA)

public transport trips q3 2019

9.9

million tonnes/quarter (sa)

45.5

57.1

61

41.6

million trips/quarter (sa)

residential property average residential rents q2 2019

1,260

1,410

1,100

952

residential property price index aug 2019

1,713

65

97

106

55

â‚Ź/quarter

1,200

800

87

76 1,560

housing completions q2 2019

108

500

105

index 2005 = 100

1,500

1,628

1,890

units/quarter

commercial property dublin city centre office rent q3 2019

460

540

380

296

dublin 2/4 office vacancy rate q3 2019

15 620

700 â‚Ź/sq.m.

700

25

4.4

17

14

20

9

4

dublin suburbs office vacancy rate q3 2019

10

30

%

6

21

5.9

25

%

sources: cso, pmi markit; seaport cargo dublin port; public transport nta; residential rents prtb; commercial property cbre research

// 15

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