The latest Dublin PMI from IHS Markit, produced for Dublin City Council, shows business activity in Dublin returned to growth in Q3.

It follows the steep contraction caused by Covid-19 and the associated lockdown measures in Q2.

However, the overall increase to 51.2 indicates marginal growth, as the rebound lost steam at the end of the quarter.

Manufacturing registered the strongest recovery of the three monitored sectors, followed by construction while the service sector continued to face challenging conditions - with the hospitality and leisure sectors bearing the brunt of the restrictions.

Employment contracted for the second consecutive quarter, as companies remained reluctant to expand their work-forces.

However, it shows that the fall in staffing levels was only slight and much softer than that seen in the previous quarter.

Renewed restrictions in Dublin in September saw new orders continue to contract in the capital, albeit at a slower pace than in Q2.

This is in contrast to the rest of Ireland where new orders returned to growth in Q3.

Commenting on the PMI, Andrew Harker, Economics Director at IHS Markit said the environment for businesses in the capital and across the country will remain severely challenged in Q4.

"With pandemic restrictions now being tightened again, the fourth quarter looks set to provide further challenges for companies and puts into doubt the ability of the local economy to recover quickly," he said.