Dublin became the economic, political, and cultural centre of Ireland after rapid expansion in terms of population and wealth in the 18th century. As recently as the 1960s, the city started to get rid of its inner slums by moving the working class to suburban neighbourhoods. Through the mid-1990s to the mid-2000s, Ireland experienced an economic boom (the country being dubbed as the “Celtic Tiger”) and Dublin expanded to its modern form. However, the onset of the banking crisis and the bursting of the property bubble over 2008-2009 brought significant hardships to Dublin’s economy, escalating unemployment and emigration. Nonetheless, the city has managed to recover and, over 2011-2016, Dublin posted the fastest rate of real GDP growth among major developed economies of the world. This is mainly thanks to the country’s low corporate tax rate, which has helped the capital attract foreign direct investment.
Overview of Dublin
The average labour productivity was USD159,000 as of 2016 and among the highest in the world. Ireland’s “tax haven” statute will increase this productivity. Dublin held a 40% labour productivity advantage in 2016, higher than the rest of Ireland. This is explained by the overwhelmingly higher share of GVA generated by tertiary industries, which is 76% of total GVA, versus only 28% in the rest of the country. A higher share of the employed population active in tertiary industries in Dublin versus the rest of Ireland (82% versus 68%) resulted in a 15% disposable income advantage in the city in 2016. Globally, the USD63,000 figure in 2016 is a still robust performance above that of Gothenburg (USD61,300 in same year), Munich (USD60,900) and most Western European metropolises.
Average household spending (excluding transport and housing) was only 9.7% higher in Dublin than in the rest of Ireland in 2016. In comparison with the rest of the country, Dubliners demonstrate a greater inclination towards education, but also towards leisure expenses. Combined per-household spending on housing and transport in the city was only 8.7%. This is above the rest of the country in 2016. Housing in the city is considerably less affordable than the rest of Ireland due to an acute shortage of housing. In 2016, housing demanded 14% higher expenditure per household in the city compared with elsewhere in Ireland. On the other hand, Dubliners spent 1.2% less on transportation in 2016 due to a well-developed public transportation network and a lower abundance of private cars.
Largest Players in Dublin
Manufacturing is the first largest sector by GVA, with a 19% share of the total (far from the sector’s impressive 66% share in the rest of Ireland). Labour productivity in the sector is impressive: USD310,000 per employee as of 2016, yet 38% lower than elsewhere in Ireland. Such figures, unusual for manufacturing, reflect the presence of major companies like medical equipment producer Medtronic, medicine producer Allergan, and power management system producer Eaton. They are multinational or foreign groups with annual turnover exceeding USD10 billion each, settling in Dublin for tax purposes. Commerce is the second largest sector by employment. Transportation, trade and tourism play major roles in the commerce sector. Dublin is also a thriving retail centre in Ireland. The city has nine retail parks and 37 shopping centres, with Dundrum Town Centre being one of the best known. The transportation industry mainly revolves around Dublin Airport and Dublin Port, the latter of which provides multi-modal services with connections to transshipment ports such as Rotterdam. Dublin Port handles almost 50% of all trade in Ireland.