Business activity showed a modest pick-up in Dublin in the fourth quarter of 2019, the latest Dublin Economic Monitor shows.

The monitor is produced by EY-DKM Economic Advisory on behalf of the four Dublin Local Authorities.

It said receding global trade tensions and temporary clarity over Brexit helped the Dublin manufacturing sector return to expansionary territory for the first time since the fourth quarter of 2018, while services output also accelerated. 

However, Brexit uncertainty was still apparent in Dublin Port with throughput seeing its second consecutive quarter of decline.

The Mastercard SpendingPulse, which is published as part of the DEM, showed that despite weakness in spending on discretionary goods, Dublin retail sales growth was solid in the fourth quarter, rising at a pace of 3.3%. 

But tourist spending growth continued to ease with spending across Ireland up 4% and up by 3.7% in Dublin - both growth rates were in double digit territory throughout 2018. 

While tourist spending from the US continues to grow strongly, this is offset by weakness in spending from the British, German, French and Chinese tourists. 

The DEM noted that weakness in the latter was more pronounced in Dublin, with the Dublin number up 4.1% compared to growth of 7.6% nationally. 

Today's monitor also showed that Dublin property prices continued to stabilise. The index recorded negative year on year growth for four consecutive months at the end of 2019 - the longest spell of deflation in house prices since late 2012. 

But average Dublin residential rents continued to record strong growth and the average rent in Dublin stood at €1,762 after year on year growth of 6.7%. 

Meanwhile, the city's unemployment rate is now at its lowest level in over 14 years. Unemployment of 4.4% was recorded in Q3 2019 and represents a fall of 9.3 percentage points since 2012 when the unemployment peaked at 13.7%.

And office vacancy rates in Dublin's 2 and 4 districts are now at their lowest levels in over 10 years.

Ciara Morley, economist with EY-DKM Economic Advisory, said that since the economic crises at the beginning of the last decade, Dublin has emerged as one of the fastest growing cities in one of the fastest growing economies in Europe. 

Ms Morley noted that unemployment is now at its lowest level in almost 15 years and the workforce is at an all-time high. 

But she added that this success has brought with it its own challenges and Dublin is now facing several issues that are impacting its international competitiveness. 

"Our analysis shows, for example, that the challenges in the housing market - where average residential rents have increased in Dublin by 6.7% year on year  are causing a drag on Dublin's position in rankings focused on the quality and cost of living," the economist said.

"Policies to boost housing supply, and thus affordability, in the city should go some way to improving the quality and cost of living for residents and expatriates alike," she added.