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Self-employment increases by 10,000 in Western Region

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The biggest change in the Western Region’s labour market over the past year has been an exceptionally rapid expansion in self-employment.  According to a special run of the CSO’s Quarterly National Household Survey for Quarter 1 2016 for the Western Region, between Quarter 1 2015 and Quarter 1 2016 the number of people in the Western Region who are self-employed grew by 15.4%. That was an increase of 10,000 people, from 65,000 up to 75,000.  This was in sharp contrast to the change in the number of people who were working as employees in the region, which actually declined marginally over the same period -0.2% (from 249,600 down to 249,200).

There has been a steady upward trend in the numbers self-employed in the region since 2012, but 2016 was marked by an exceptionally large rise (Fig. 1). From Fig. 1 it can be seen that the number of self-employed who are employing others actually declined between 2012 and 2014 but has grown strongly since.  Indeed between 2015 and 2016 this type of self-employment increased by a quarter (up 25%).  The strong growth in the number with employees is a very positive indication of the growth potential of some of these businesses. Currently there are 19,000 people self-employed and employing others in the Western Region.

Self-employed with no paid employees is by far the more common type of self-employment however.  This has grown in each year since 2012, except 2015, and increased by 12.4% in the past year to now stand at 56,000. This type of self-employment plays a key role in ensuring that people can continue to live and work in smaller towns and rural areas.

Fig. 1: Number of self-employed persons in the Western Region, with and without paid employees, Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

Fig. 1: Number of self-employed persons in the Western Region, with and without paid employees, Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

The growth in self-employment was the sole driver of any jobs growth that took place in the Western Region in this period.  The total number of people at work in the region rose by 3.5% between Q1 2015 and Q1 2016 and this was entirely due to self-employment.

Contrast to situation in rest of the state

The massive growth in self-employment between 2015 and 2016 was unique to the Western Region.  For the rest of the state (all other counties in Ireland combined) the number of self-employed people actually fell during this period by -1.3%, it was the same for those with and without employees.  The number of people working as employees grew however (up 2.8%) in contrast to the decline experienced in the Western Region.

Total jobs growth in the rest of the state was lower than that in the region (2.2% v 3.5%) over the period and the region’s stronger overall performance was caused by people creating their own jobs. While the region had stronger jobs growth during 2015-2016, over the longer period since 2012 the region has had lower growth.  The total number in employment rose by 6.4% in the Western Region between 2012 and 2016, but by 8.7% in the rest of the state.

High share of all jobs are in self-employment

The Western Region’s labour market differs markedly from that elsewhere.  The recent growth in self-employment in the region has further reinforced its key role.  22.9% of people at work in the Western Region work for themselves, while in the rest of the state it is 15.2% (Fig. 2).

In the rest of the state the share of self-employed has not fluctuated a great deal over the past decade.  There was only a 1.5 percentage point difference between the highest and lowest years.  In the Western Region, volatility has been far greater with a 4.3 percentage point difference between the highest (2016) and lowest (2012) years.  It is notable that the share now in 2016 is even higher than it was in 2007 or 2008 when self-employment in the construction sector would have been at its highest.

Fig. 2: Total self-employment as a percentage of total number in employment in Western Region and rest of state, Q1 2007 – Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

Fig. 2: Total self-employment as a percentage of total number in employment in Western Region and rest of state, Q1 2007 – Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

Reasons for growth

The underlying factors driving strong self-employment growth in the region are varied and complex.  The relative lack of more standard forms of job opportunities, especially in smaller towns and more rural areas can mean that in order to remain living in these areas people need to choose the option of self-employment.  General trends in the world of work such as the growth of the so-called ‘gig economy’, contract working and trends to outsourcing of certain services and activities by larger companies (e.g. transport) is also driving growth in self-employment, though whether such trends would manifest themselves more strongly in the Western Region is unclear.

The other key explanation for the growth in self-employment, while employee numbers fell, was the sectoral pattern of jobs growth during this period.  At a sectoral level the strongest jobs growth by far was in accommodation & food service, perhaps partly influenced by the Wild Atlantic Way tourism initiative as well as increasing domestic demand, followed by transportation & storage and construction (Fig. 3) all of which are sectors that show high levels of self-employment.

Fig. 3: Percentage change in number in employment by sector in Western Region, Q1 2015 - Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

Fig. 3: Percentage change in number in employment by sector in Western Region, Q1 2015 – Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

The 2014 Business Demography data showed that in the Western Region 88.8% of those working in accommodation & food service enterprises were employees with the remainder (11.2%) either owners or relatives.  In the rest of the state only 6.5% were owners/relatives showing greater self-employment in this sector in the region.  For transport the share of owners/relatives was 33.7% in the region compared with 21.5% in the rest of the state while for construction the difference was 43.4% in the region compared with 30.1% elsewhere. The three sectors with the strongest jobs growth in the Western Region between 2015 and 2016 all exhibit a far greater extent of self-employment in the region.

In contrast, industry, the sector which has the highest share of employees (96%) and therefore the lowest share of self-employment (4%), actually had jobs decline in the Western Region between 2015 and 2016.  The predominantly public service sectors of education, health and public administration, which would have low shares of self-employment, also reduced employment over the past year.

Conclusion

Increasingly, jobs growth in the Western Region is driven by self-employment and far more so than in the rest of the state.  This has significant implications for how jobs growth in the region is being, and can be, supported and encouraged.  It shows the importance of supports for the self-employed including issues around social protection, enterprise supports especially soft supports as many may be in locally trading sectors not eligible for grant aid, work space, broadband access and opportunities for networking.  The growth in the number of self-employed with employees is very positive and shows the potential contribution of the self-employed to jobs growth.  It also shows the importance of making it as easy as possible for the self-employed to begin hiring employees as well as the provision of information and advice on employment law and employee rights.

At the same time, these figures raise concerns about the capacity of job creation in other types of businesses, as the number of employees actually declined in the past year in the region while growing elsewhere. This seems to have been due to employment in the predominantly public sectors of education and health (significant employers) falling in the region, while growing in the rest of the state.  Jobs in industry and information & communications also declined.  We will return to the topic of 2016’s sectoral employment performance in a future post, but for now it is important to note that in the Western Region those sectors driven by self-employment are strongly out-performing the others.

Pauline White

Jobs Growth Continues but Slowing in BMW regions

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The latest CSO Quarterly National Household Survey was released yesterday. This data refers to the period Quarter 2 (April-June) 2016.

The overall picture is quite positive with the number of people at work increasing by 2.9% in the past year (Q2 2015–Q2 2016).  This is almost identical to employment growth in the previous year, 3% between Q2 2014 and Q2 2015.  There seems to be a steady continuation of jobs growth nationally.

Regional patterns of employment growth

As with all national data, if you drill down to regional level you find some interesting differences.  Fig. 1 shows employment growth in each of the eight NUTS3 Irish regions over the past two years. In the most recent year (Q2 2015-Q2 2016) regional employment growth ranged from 4.3% in Dublin to just 0.5% in the Midland region.  While Dublin, the Mid-East, South East and Mid-West all had higher growth than the national average, employment in the Midland, South-West and West regions increased by under 1%.

Fig. 1: Percentage change in number of people in employment by NUTS3 region, Q2 2014–Q2 2015 and Q2 2015–Q2 2016. Source: CSO, Quarterly National Household Survey, Q2 2016

Fig. 1: Percentage change in number of people in employment by NUTS3 region, Q2 2014-Q2 2015 and Q2 2015-Q2 2016. Source: CSO, Quarterly National Household Survey, Q2 2016

Compared with a year previously (Q2 2014-Q2 2015), Dublin, the Mid-East and Mid-West experienced higher growth; in all other regions it was lower. The Greater Dublin Area (Dublin and Mid-East) in particular experienced far greater jobs growth from 2015 to 2016 than it had the previous year.  The Border and South-West meanwhile had very substantially lower growth.

When examining statistics at a smaller scale of course, they are more prone to fluctuation across years e.g. a major factory closure or opening in a year can strongly influence growth/decline in a region. However, there does seem to be a general pattern of some slow-down in jobs growth in the Border, Midland and West (BMW) region, as well as the South-West, over the past year.

Regional unemployment rates

In Q2 2016, unemployment rates ranged from 10.8% in the South East to 6.9% in the neighbouring Mid-East (Fig. 2). The three BMW regions also had unemployment rates above the national average.

Fig. 2: ILO unemployment rate in NUTS3 regions, Q2 2016 (not seasonally adjusted). Source: CSO, Quarterly National Household Survey, Q2 2016

Fig. 2: ILO unemployment rate in NUTS3 regions, Q2 2016 (not seasonally adjusted). Source: CSO, Quarterly National Household Survey, Q2 2016

Tracking unemployment rates since 2007 (Fig. 3) it is clear that the South East and Midland regions have consistently shown the highest unemployment rates, though they are following the general pattern of decline since 2012.  The Mid-east, Mid-West and South West showed the steepest declines in their unemployment rates over the past year.  The first two also had strong employment growth (see Fig. 1 above).

Fig. 3: ILO unemployment rates in NUTS3 regions, Q2 2007 – Q2 2016 (not seasonally adjusted). Source: CSO, Quarterly National Household Survey, Q2 2016

Fig. 3: ILO unemployment rates in NUTS3 regions, Q2 2007 – Q2 2016 (not seasonally adjusted). Source: CSO, Quarterly National Household Survey, Q2 2016

Decline in numbers in unemployment

The Border and Dublin regions showed practically no change in their unemployment rates between 2015 and 2016 (see Fig. 3 above). The reason for this is clear from Fig. 4. Dublin was the only region that actually experienced an increase in the number of people unemployed.  The very strong growth in Dublin’s labour force over the past year (4.4%) led to both strong growth in the numbers at work and also increased unemployment.

The Border had the smallest decline in the number of unemployed.  This compares with a very substantial fall the previous year. These two regions, plus the West, were the only ones with a smaller improvement in unemployment in this period than the previous.

There were large unemployment declines in the South West, Mid-West and Mid-East reflected in their sharply declining unemployment rates (see Fig. 3 above).  Apart from the first, these regions also showed strong employment increases (see Fig. 1 above) indicating that a significant cause of the fall in unemployment was likely movement into employment.  In the case of the South West however, it had relatively low employment growth ( see Fig. 1 above). This region had the largest fall in the size of its labour force in this period (-1.9%), so an important factor in its unemployment decline was likely unemployed people leaving the labour force (e.g. moving out of the region, retiring, returning to education).

Fig. 4: Percentage change in number of people unemployed by NUTS3 region, Q2 2014–Q2 2015 and Q2 2015–Q2 2016. Source: CSO, Quarterly National Household Survey, Q2 2016

Fig. 4: Percentage change in number of people unemployed by NUTS3 region, Q2 2014–Q2 2015 and Q2 2015–Q2 2016. Source: CSO, Quarterly National Household Survey, Q2 2016

Conclusion

The latest QNHS figures show a continuing positive labour market trend nationally and regionally. There are indications however of some slowing down of employment growth in the BMW regions as well as relatively lower falls in unemployment compared with some other areas of the country.   This is reflected in persistently higher unemployment rates in the Midland, Border and West regions, as well as the South East. The Greater Dublin Area (Dublin and Mid-East) has shown particularly strong jobs growth in the past year, though Dublin’s expanding labour force has meant that this jobs growth has not led to declining unemployment.

The regional data shows that Ireland has a complex labour market with many factors influencing regions’ performance.  When the full Census 2016 results are published next year, it will be possible to drill down to a far smaller spatial scale to examine labour market patterns within these NUTS3 regions and the different experiences of rural areas, small towns and villages, large urban centres and the cities.

Pauline White

Impact of Sectors on Western Region’s Jobs Recovery

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Our last blog post examined the role that sectors play in regional GVA. Sectors also have a huge impact on the pattern of jobs growth.  Following on from our April WDC Insights publication ‘Jobs Recovery in the Western Region’, the WDC has just published new analysis examining the role that sectors have played in recent jobs trends.

‘Impact of Sectors on Western Region’s Jobs Recovery’ examines some of the causes for the region’s slower jobs recovery.

Lower jobs diversity

There is greater concentration of employment in a few sectors in the Western Region.  62.2% of jobs in the region are in its top five sectors (Industry, Health, Wholesale & Retail, Agriculture and Education) compared with 53.6% in the rest of the state.  Greater diversity in employment across sectors is an important aspect of regional resilience and growth.

Traditional and public sectors more important; services less so

The region has higher shares working in the traditional sectors (Agriculture, Construction, Industry) and also Public Services (Health, Education, Public Admin) than in the rest of the state (Fig. 1).

Fig. 1: Percentage of employment by broad sector, Western Region and Rest of State, Q1 2015

Fig. 1: Percentage of employment by broad sector, Western Region and Rest of State, Q1 2015

At the same time, there are lower shares employed in Locally Traded (Retail, Accommodation, Transport) and Knowledge (ICT, Finance, Professional) Services.  For Locally Traded Services, as these rely on domestic demand, lower incomes in the region  compared with much of the rest of the state may be a factor in this.  It also helps to explain the region’s higher youth unemployment as these are areas (shops, bars) where young people often find work.

The high-value Knowledge Services sectors is where the region lags the rest of the state most significantly.  These are seen as key sectors for growth and their poor performance is a cause for concern.

Strength in manufacturing

Manufacturing plays a more important role in the region’s employment, accounting for 15.6% of jobs compared with 12.2% in the rest of the state.  Between 2012 and 2015 growth in manufacturing jobs in the Western Region was more than twice that as in rest of state – 8.3% v 3.4% (Fig. 2).  The region’s manufacturing strength has been a key factor in the West’s relatively strong recovery in GVA.  Manufacturing is a key regional strength.

Decline in market services sectors

Between 2012 and 2015 there was jobs decline in the three market services sectors (Administration and Other, Locally Traded and Knowledge) in the Western Region, while they grew elsewhere in the state (Fig. 2).  This is the main reason for the Western Region’s slower jobs recovery.

Fig. 2: Percentage change in employment by broad sector, Western Region and Rest of State, Q1 2012 – Q1 2015

Fig. 2: Percentage change in employment by broad sector, Western Region and Rest of State, Q1 2012 – Q1 2015

Similar to the rest of the state, Agriculture and Construction saw the largest increases in job numbers in the Western Region, driven by strong agri-food exports and a resurgence in building activity.

Conclusion

This WDC Insights shows that slower jobs recovery in the Western Region is mainly due to contraction in market services sectors, in contrast with growth elsewhere.  In every year since 2011, the numbers working in the Western Region in both Knowledge Services and in Administration and Other Services has declined. This was during a time of recovery nationally.

While the region’s strong manufacturing base and Public Services employment have compensated to some extent, it has not been enough to allow the region to enjoy a similar rate of jobs recovery as elsewhere.  Optimising growth across all sectors, and addressing challenges in the market services sectors in particular, will be required for a healthier and more resilient regional labour market.

Pauline White

 

Source: All data taken from a special run of the CSO’s Quarterly National Household Survey, Quarter 1 2012-2015 for the seven county Western Region.

Strong jobs growth in manufacturing but decline in market services in Western Region

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Between 2012 and 2015 employment in market services sectors declined in the Western Region, but grew in the rest of the country.  This is the main reason for slower jobs recovery in the Western Region, where employment grew by 2.8% compared with 6.3% in the rest of the state during that period.  That’s according to a new Western Development Commission (WDC) publication ‘Impact of Sectors on Western Region’s Jobs Recovery’.

Market services are businesses which supply services to consumers or other businesses.  During 2012-2015, jobs in Administration and Other Services (-11.4%), Locally Traded Services (retail, hospitality, transport) (-7.5%) and Knowledge Services (finance, ICT, professional services) (-7.3%) all declined in the Western Region.  This was during a period of recovery in these sectors nationally.

‘Many of these businesses rely on consumer spending.  Lower incomes in the region than in much of the rest of the state is one of the challenges they face.  The decline in Locally Traded Services has also contributed to the region’s higher youth unemployment rate of 30.8% compared with 20% in the rest of the state.  These are areas where young people often find work,’ according to Paddy McGuinness, Chairperson of the WDC.

‘Job declines in high-value, knowledge services such as ICT, which are seen as key to future growth, is a particular concern.  Improving the region’s capacity to attract and grow knowledge services activities must be central to jobs and enterprise strategies,’ he added.

On a positive note, the region’s manufacturing sector is performing strongly.  Employing 50,000 people, Industry is the single largest employer in the Western Region.  It is also more important to regional employment, accounting for 15.6% of all jobs compared with 12.2% in the rest of the state.  Over the three years 2012-2015 industrial employment in the Western Region grew by 8.3%, more than twice the growth in the rest of the state (3.4%).

‘Our manufacturing base is a core strength for the Western Region.  It is critical that we build on this strength and maintain our competitiveness as a location for globally trading Irish and foreign-owned companies, offering a highly skilled workforce, top class infrastructure and responsive higher education institutions,’ concluded Mr. McGuinness.

Similar to the rest of the state, Agriculture (+32%) and Construction (+18.2%) saw the largest increases in job numbers, driven by strong agri-food exports and a resurgence in building activity.

Download the two-page WDC Insights publication ‘Impact of Sectors on Western Region’s Jobs Recovery’ here

 

Notes to Editor:

All data taken from a special run of the CSO’s Quarterly National Household Survey, Quarter 1 2012-2015 for the seven county Western Region.

The Western Development Commission (WDC) (wdc.ie) is the statutory body promoting economic and social development in the Western Region (counties Donegal, Sligo, Leitrim, Roscommon, Mayo, Galway and Clare). Its strategic goals are:

  • To inform policy-making on economic and social development in the Western Region through high quality analysis.
  • To promote the benefits of living, working and doing business in the Western Region.
  • To encourage the development of the rural economy based on the sustainable development of the Western Region’s strengths and resources.
  • To provide risk capital to micro, small and medium sized and social enterprises in their start-up and expansion phases through the WDC Investment Fund (WIF).

Read the weekly WDC Insights Blog and follow @WDCInsights on Twitter.

Self-employment Driving Jobs Growth in the Western Region

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30.8% Youth Unemployment Rate

Jobs growth in the Western Region is much slower than in the rest of the country.  Over the three years 2012-2015, the number of people at work in the region grew by just 2.8%, which was less than half the growth in the rest of the state at 6.3%. That’s according to a new Western Development Commission (WDC) publication ‘Jobs Recovery and the Western Region’.

Interestingly, many of the new jobs are classified as self-employed which demonstrates that there is an entrepreneurial culture in the region.  Over this period, the number of self-employed increased by 13.6% compared with just 0.7% growth in the number of employees.  Self-employment is a more important source of jobs in the region than elsewhere, with 1 in 5 working people in the region self-employed, compared with 1 in 6 in the rest of Ireland.

‘While the jobs recovery that is taking place in the Western Region is welcome, the slower pace means the region is not fully benefitting from improving economic conditions.  Limited job options, particularly in smaller towns, villages and  more rural areas, means that more people are having to create their own jobs,’ according to Paddy McGuinness, Chairperson of the WDC.

‘65,000 people work for themselves in the Western Region with over three-quarters of them working alone.  Fully recognising and supporting self-employment as a source of jobs growth is central to the region’s future.  Addressing issues such as social protection, broadband access, isolation and support to scale are vital for the region’s self-employed,’ he added.

The region’s slower jobs recovery is impacting on young people (15-24 yrs) in particular.  In 2015 the region’s youth unemployment rate was 30.8% compared with just 20% for those living in the rest of the country.  Young people who are out of work and not in education or training for a long time, face serious barriers in finding work.

Fig 1 - Youth unemployment rate 2006-2015

Employment in several of the sectors where young people often find jobs, such as retail and hospitality, declined in the Western Region between 2012 and 2015, while it grew in the rest of the country.

‘Our region’s young people are suffering because of the uneven regional spread of Ireland’s jobs recovery.  This reality needs to be acknowledged and addressed in any Programme for Government agreed in discussions presently taking place on the formation of a new Government,’  concluded Mr. McGuinness.

Notes:

The two-page WDC Insights publication ‘Jobs Recovery and the Western Region’ can be downloaded here

All data taken from a special run of the CSO’s Quarterly National Household Survey, Quarter 1 2012-2015 for the seven county Western Region.

Jobs Recovery and the Western Region

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New WDC Insights publication

Ireland has been experiencing a gradual recovery in employment since 2012.  While jobs growth is occurring in the Western Region, it is not following the same pattern, nor occurring at the same rate, as elsewhere.

A new WDC Insights publication examines some of the distinctive aspects of the Western Region’s labour market.  Some key points are:

Lower jobs growth:  Between 2012 and 2015, there was 2.8% growth in total employment in the Western Region, less than half the jobs growth experienced in the rest of the state over the same period (6.3%) (Table 1).

Table 1- Selected employment indicators 2012-2015

Jobs growth driven by self-employment:  The jobs growth that is occurring in the region is strongly driven by self-employment.  Between 2012 and 2015 the number of self-employed in the Western Region grew by 13.6%, much higher than the 8.6% increase in the rest of the state.  On the other hand, the number of employees only grew by 0.7% in the region compared with 5.8% growth in the rest of the state over the same period.

Higher youth unemployment rate:  Young people (15-24 yrs) in the Western Region face an unemployment rate of 30.8% compared with 20% for those living in the rest of the country (Fig. 1).  Young jobseekers in the region are facing considerable barriers to accessing a job.

Fig 1 - Youth unemployment rate 2006-2015

The Western Region is experiencing a jobs recovery but this is occurring at a slower pace than elsewhere.  The key role of self-employment in the region’s jobs growth shows that it is a key route to employment, especially in rural areas with fewer job options.

The region’s young people are facing particularly stark labour market challenges.  Young people who are not in employment, education or training (NEET) for an extended period of time, face considerable barriers in accessing work.  This is likely to be compounded by the overall slower jobs recovery occurring in the region.

Download WDC Insights: Jobs Recovery and the Western Region

E-Working – what are the trends?

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E-work or electronic working, also referred to as teleworking, are terms used to describe work which uses communications technology to work remotely from the office location.

With the widespread rollout of broadband services it might be expected that e-working is becoming more common. Is e-work more prevalent in urban or rural areas? To what extent does weaker broadband access in more rural locations impact on the rate of e-working? What are the other factors driving e-work?

What does the data say?

The evidence on e-working in Ireland is limited and complicated by different definitions.

Time series data is available from the Census and the most recent data available is from 2011. The 2011 Census asks whether one ‘works mainly at or from home’. Trend data shows that the level and share of those working mainly at or from home is in decline, as the chart below shows.

Chart 1. Population at work, population working mainly at or from home and share of working population working mainly at or from home

E-working trends

Source: CSO Census of Population: Statbank Interactive tables

In 1986 17.2% of workers were reported as working at or mainly from home and this had declined to 4.7% in 2011. However this includes those engaged in agricultural employment and the decline in numbers engaged in this sector would largely explain the overall decline.

In 2002, the CSO carried out a special survey on Teleworking, which examined the profile of teleworkers in Ireland across a range of characteristics. It distinguished between (1) those who work from home and (2) those who work from home and use a computer and (3) those who work from home and need a computer with a telecommunications link, this latter group are defined as teleworkers. This survey found that nationally 2.3% of those in employment were classed as teleworkers. It should be noted that these data exclude workers in the Agriculture, forestry and fishing sector.

More recently a survey conducted by UPC (3.41 MB) in 2014 found that 47% of Irish employees use the internet at home in relation to work, up from 45% in 2012.

Regional differences

There are regional differences recorded, for example in the CSO 2002 survey the Mid-East region recording the highest rate at 2.9%. This is followed by Dublin with 2.7% of those in employment classed as teleworkers. Commuting to Dublin is likely to be an important driver explaining the higher rate in the Mid-East. The lowest rate of teleworking was recorded in the Mid-West with a rate of 1.5% of all in employment classified as teleworking. The West region, comprising largely rural counties of Mayo, Roscommon and Galway, recorded a rate of 2.2% teleworkers as a percentage of those in employment, higher than might be expected if access to quality broadband was a key driver.

More questions than answers

The difference in e-working levels reported – from 2.3% in the CSO 2002 survey through to 47% employees from the UPC 2014 survey raise further questions. Definitional differences no doubt explain some of the difference, though it is also likely that excluding Agriculture, the trend is may be upward, as evidenced by the UPC findings.

The 2016 Census figures should be available next year and it will be interesting to identify trends, especially since the return to employment growth. In the meantime further analysis of Census 2011 data is planned, examining occupational, sectoral and regional differences.

Other aspects to be examined in forthcoming work by the WDC include positive benefits that can accrue from more e-working such as carbon savings through lower transport emissions, more family friendly working and greater opportunities for employment creation and retention in more rural locations.

 

Deirdre Frost

 

Image source:www.alliedworldwide.com

 



	Uneven regional impact of Ireland’s jobs recovery				
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There was a lot of discussion of the jobs recovery during the election campaign. In fact ‘Jobs’ was consistently ranked No. 2 in Google searches related to the Irish election this year (just behind Taxes). And much of the discussion was about where those jobs were being created.


The results of this year’s Census will give a great opportunity to really interrogate the spatial patterns of Ireland’s recent jobs performance and what has happened since 2011, especially to consider how any recovery has benefitted rural areas, villages, small towns, disadvantaged urban areas etc. However those results will not be available until 2017 so in the meantime we need to rely on survey based data, which is limited in its availability at regional or county level.


As the labour market is extremely complex, it’s difficult to fully capture that complexity, especially at smaller spatial scales where a single employer or event can have a major impact. In this blog post therefore I’ve taken a very broad look at regional job trends to try to provide a snapshot of what’s happening. The latest available regional employment data was published last week (CSO, Quarterly National Household Survey, Quarter 4 2015) and is used here.


Percentage change in employment 2006-2010 and 2011-2015


Fig. 1 shows the percentage change in the number of people at work in each of the NUTS3 regions. It compares two five-year periods, the crisis (Q4 2006 – Q4 2010) and the recovery (Q4 2011 – Q4 2015). As we know, during the crisis the South East, Midlands and Border were particularly hard hit by job losses. This included people who had been commuting from these regions into Dublin, many of whom had bought houses at the edges of the ever expanding Dublin commuter belt. Intimately linked to this, these regions also had a high reliance on the construction sector.


It was the Mid-East and West which had the smallest employment declines, the strength of Galway and its medical devices cluster is known to have contributed to this in the West. However, one of the most noticeable patterns in Fig. 1 is that the Mid-West and West do not seem to be benefitting from the jobs recovery, having employment decline in both periods. For a number of other regions, the growth they have experienced between 2011 and 2015 is less than their previous percentage decline. This is the case for the Border, South-East, South-West and Mid-East.  Only the Midlands has experienced stronger jobs growth than its earlier decline.


Fig. 1: Percentage change in employment by NUTS3 region, Q4 2006 – Q4 2010 and Q4 2011 – Q4 2015. Source: CSO, Quarterly National Household Survey, Q4 2015 
Fig. 1: Percentage change in employment by NUTS3 region, Q4 2006 – Q4 2010 and Q4 2011 – Q4 2015. Source: CSO, Quarterly National Household Survey, Q4 2015


Regional employment trends 2006-2015


Fig. 2 shows the number of people in employment in each of the NUTS3 regions except Dublin (which is excluded due to scale) from 2006 to 2015. The South West, with 284,000 has the highest employment of the regions shown. The South-West shows a clear pattern of decline followed by gradual recovery, but in 2015 remains below its 2007 peak. The South-East, Border and Midlands follow a similar pattern as does the Mid-East though it did have a slight decline in 2015. The only region to regain its 2007 level of employment is the Midlands.


Again, the West and Mid-West stand out as having a different experience. While they had a similar decline from 2007, their employment trends do not show any real signs of recovery. For the Mid-West, employment has remained almost unchanged since 2012, while in the West it has declined notably since 2013.


Fig. 1: Employment by NUTS3 region (excluding Dublin), Q4 2006 – Q4 2015. Source: CSO, Quarterly National Household Survey, Q4 2015 
Fig. 1: Employment by NUTS3 region (excluding Dublin), Q4 2006 – Q4 2015. Source: CSO, Quarterly National Household Survey, Q4 2015


The reasons for the weak performance of the West and Mid-West would need to be further explored. In their 2015 end of year statement, Enterprise Ireland reported that the North-West, Mid-West and West had the lowest jobs growth in companies assisted by the agency, while the poor performance of the North-West region in total agency assisted employment since 2005 has been discussed in a previous blog. The Western Region clearly faces some very serious challenges in its ability to fully benefit from the national jobs recovery.


Others have also been examining the uneven regional distribution of jobs growth, such as PublicPolicy.ie. It is a topic that clearly must be a priority for the next Programme for Government and central to the development of the new National Planning Framework, which will have to be taken up by the new Government and Minister.


Pauline White


 


	The changing face of export sector jobs				
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The nature of Ireland’s exporting sector – and jobs in that sector – has been changing over the past decade (or more), with an ever expanding role for international services. The shift towards a greater share of service jobs is of course evident across the entire economy, but is particularly noticeable in the exporting sector as an increasing number of new job announcements are service-based. The so-called Silicon Docks area of Dublin is where this pattern can be most clearly seen.


Is this change in the nature of export sector jobs occurring to the same extent in the Western Region? To analyse what’s happening at a regional and county level, we’ll use the Annual Employment Survey 2014 conducted by the Department of Jobs, Enterprise & Innovation (special run of county data). This counts all jobs in companies which have received any assistance from Enterprise Ireland, IDA Ireland or Udarás na Gaeltachta (which are primarily exporting companies).


Assisted jobs – Manufacturing v Services 


Comparing the broad sectoral structure of agency assisted jobs in 2005 (Fig. 1) shows how the pattern differed between the Western Region and the rest of the state. In 2005, 77.4% of assisted jobs in the Western Region were in manufacturing, with Traditional and Modern Manufacturing both having a similar share of around 30%. In the rest of the state, a lower share (66.7%) was in manufacturing. The pattern of a greater role for manufacturing in the Western Region’s export sector was firmly in place at that time.


Fig. 1: Total agency assisted jobs in each broad sector in the Western Region and Rest of the State, 2005 (DJEI, 2015, Annual Employment Survey 2014, special run)
Fig. 1: Total agency assisted jobs in each broad sector in the Western Region and Rest of the State, 2005 (DJEI, 2015, Annual Employment Survey 2014, special run)


By 2014 (Fig. 2) the pattern in the rest of the state had changed substantially with manufacturing’s share declining to 54.4% of jobs. Whereas the balance between manufacturing and services changed very little in the Western Region with manufacturing still accounting for 74.7% of export employment. The share of export service jobs only rose slightly from 22.6% to 25.3%.


Fig. 2: Total agency assisted jobs in each broad sector in the Western Region and Rest of the State, 2014 (DJEI, 2015, Annual Employment Survey 2014, special run)
Fig. 2: Total agency assisted jobs in each broad sector in the Western Region and Rest of the State, 2014 (DJEI, 2015, Annual Employment Survey 2014, special run)


In the rest of the state, in 2005 the ratio of manufacturing to international services jobs was exactly 2:1 but by 2014 it had shifted far closer to 1:1. For the Western Region however manufacturing continues to dominate export sector jobs at a rate of 3:1.


While the total share of export jobs in manufacturing in the Western Region changed little between 2005 and 2014, the composition of those jobs has changed. Modern Manufacturing has greatly increased its share of assisted jobs to 35%, while the shares of both Traditional and Primary/Agri-food manufacturing declined. The decline in Traditional Manufacturing in particular was closely tied to declining demand from construction, although more recent figures show some recovery in elements of this sector such as precision engineering.


The growing role for Modern Manufacturing indicates an improving level of technology and value in the region’s manufacturing sector which can be seen by the role of manufacturing in the region’s GVA.   In the latest GVA figures for the West region, 40.2% of its GVA came from Manufacturing – the second highest share nationally with only the South West having a higher share. In the Border it was 28.4%. See the WDC’s recent report on regional income and output.


Dominance of manufacturing in export businesses in western counties


This pattern of greater dominance of manufacturing in the export sector jobs profile is even stronger in some individual western counties (Fig. 3). In Mayo, Roscommon and Sligo over 85% of assisted jobs are in manufacturing. While its share declined slightly between 2005 and 2014 in these counties, overall there was little sign of growth in international services employment in these areas.


Donegal and Leitrim are the western counties with the lowest shares of their export sector jobs in manufacturing, but both are still above the rest of state average. The strong increase in the share of assisted jobs in manufacturing in Leitrim between 2005 and 2014 mainly resulted from a decline in international services jobs, a pattern which can also be seen to a lesser extent in Clare.


Among the western counties, Donegal and Galway showed the most significant declines in the share of jobs in manufacturing and consequent rise in the share of international services jobs between 2005 and 2014. These two counties appear to be the ones most closely following the national trend towards a greater role for international services.


Fig 3 Agency assisted jobs in manufacturing 2005-2014
Fig. 3: Total agency assisted jobs in manufacturing in western counties, 2005 and 2014 (DJEI, 2015, Annual Employment Survey 2014, special run)


Manufacturing activity remains the dominant driver of export sector jobs in the Western Region, at a rate of 3:1, with over 90% working in the sector in some counties. While the role of international services is growing, this is occurring to a far lesser extent in the Western Region.


Addressing issues of significance to the manufacturing sector, such as transport infrastructure, freight, engineering skills, energy, heat etc, must remain central to efforts to sustain and grow the region’s export base, both foreign and indigenous, within the national context of a growing focus on service sector jobs. At the same time, any barriers to the growth of the international services sector, such as high speed broadband, need to be investigated and addressed.


Pauline White


	Job creation in 2015 – EI and IDA end-of-year statements				
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Both Enterprise Ireland (the state agency charged with supporting exporting indigenous enterprises) and the IDA (the state agency responsible for supporting Foreign Direct Investment) issued very upbeat end-of-year statements this week. So, how did the region’s fare?


Enterprise Ireland


In 2015 total employment in EI client companies was 192,223, of which 165,630 were full-time jobs. 2015 saw the highest level of new jobs created by EI supported companies in the agency’s history (about 17 years) with 21,118 new jobs created. Taking into account job losses over the year, the net increase was about half this at 10,169 net new jobs.


Of this net increase in EI client jobs, 64% occurred outside of Dublin. It is notable that the regional performance got considerably greater focus in this year’s end-of-year statement Press Release than has been the case for the past number of years. The evident dissatisfaction in many regional locations caused by a two-speed jobs recovery, which led to the preparation of the regional Action Plans for Jobs and several other regional EI initiatives last year, has led to greater emphasis on regional performance in this year’s end-of-year statement. As indeed has the fact that that performance has been quite strong.


While the overall regional picture may be quite strong, the relative performance across the various regions differs (Fig. 1). The increase in jobs in EI client companies in 2015, compared with 2014, varied from +36% in Dublin to just +2% in the North West. Indeed the North West, Mid-West and West – the three EI regions covering the Western Region – had the lowest increases in job numbers across the country at +2%, +3% and +5% respectively. Sticking with the two-speed jobs recovery metaphor, the Western Region appears to be running at the lowest speed of all, at least in the context of indigenous exporting companies.


Infographic from the Enterprise Ireland end-of-year statement 2015
Fig. 1: Infographic from the Enterprise Ireland end-of-year statement 2015 https://enterprise-ireland.com/en/News/PressReleases/2016-Press-Releases/End-of-Year-Statement-2015.PDF


A previous WDC Insights Blog post highlighted the particular issue of the North West’s poor performance in terms of all types of agency assisted employment (EI, IDA and Udarás). Between 2005 and 2014 the North West experienced the largest decline in agency assisted jobs of any region in Ireland. And now in 2015 it’s the region with the lowest increase in EI supported jobs. This points to a very real concern for the North West’s capacity to generate new employment in export focused businesses, even when Ireland is experiencing some of its strongest ever jobs growth in this type of business.


IDA


2015 saw the highest level of employment in IDA client companies in the organisation’s 67 year history reaching 187,056. A total of 18,983 new jobs were created by their clients during 2015, when job losses are taken into account, there was net job creation of 11,833, slightly higher than that recorded by EI clients.


Similar to EI, the IDA’s end-of-year statement gives more focus to regional performance than in some previous years. Overall, 53% of all jobs created by IDA clients in 2015 were based outside of Dublin, which is an improvement over the 49% share in 2014.


While 53% of new jobs were created outside of Dublin in 2015, this area accounts for 59% of total employment in IDA backed companies. The legacy of past investments in more regional locations continues to influence the overall pattern of FDI jobs, even as new investments tend to be attracted to more urban areas.


The IDA end-of-year statement doesn’t provide detail on the differences across the regions, though it does note that every region experienced an increase in employment in IDA backed companies. It will be very interesting to see the detailed regional breakdown of this performance to see if it shows a similar inter-regional pattern to the EI client companies, with the Western Region having the lowest growth. Although the strength of Galway in attracting FDI means the West region may show a stronger performance in foreign owned employment in 2015 than in Irish owned.


While overall, 2015 was very positive in terms of regional job creation by both EI and IDA client companies, the inter-regional differences in the results for EI companies would indicate that more needs to be done to increase the pace of the jobs recovery in the Western Region.


Pauline White