Covid 19 Pandemic Unemployment Payments in the Western Region

 

Continuing our analysis of the economic and social impacts of the Covid 19 pandemic on the Western Region it is useful to look at the number in Western Region counties in receipt of the Pandemic Unemployment Payment (PUP) today, 19th May.

The Department of Employment Affairs and Social Protection has provided a county breakdown for the (PUP) payments , valued at €201.8m, just issued to 585,000 people (of which 252,800 are female and 331,800 are male).  The Covid-19 Pandemic Unemployment Payment (PUP) is an emergency payment for employees and the self-employed who have lost their income and are fully unemployed due to the pandemic. It is paid at a rate of €350 per week into a recipient’s bank account.

While the PUP is the most significant payment, there are also over 54,000 employers who have registered with the Revenue Commissioners for the Temporary Covid-19 Wage Subsidy Scheme (TWSS) with at least one subsidy being paid in respect of over 464,000 people under that scheme (there is no county breakdown available for this).  These payments are in addition to the 214,700 people who were reported on the Live Register as of the end of April[1][2].

 

The Pandemic Unemployment Payment (PUP) in the Western Region

Of the 585,000 in receipt of the payment, 102,800 are in the Western Region.  This accounts for 17.6% of the national total while the Western Region accounted for 16.8% of the Labour Force in 2016 (the most recent data at this level).  The number in receipt of the PUP has fallen slightly (2.2%)  from 598,000 on 5th May (104,900 in the Western Region) as some recipients have begun to return to work and some employers have entered the TWSS.

Figure 1 shows the number of people in receipt of the PUP in the Western Region counties and in Kerry and Limerick, which, along with the Western Region counties, make up the Atlantic Economic Corridor (AEC).  In the Region, Galway (31,800) and Donegal (22,200) have the most people in receipt of the payment, with more than 20,000 people also receiving the payment in Kerry and Limerick.  Leitrim (4,000), Roscommon, (6,900) and Sligo (7,500), the smaller counties, have the lowest number of recipients (and the smallest numbers nationally, along with Longford (4,500) and Carlow (7,500)).

 

Figure 1: Number of people in receipt of Pandemic Unemployment Payment on 19th May in Western Region and AEC counties

Source: https://www.gov.ie/en/news/7fc9de-update-on-payments-awarded-for-covid-19-pandemic-unemployment-paymen/  Appendix 2

 

Clearly the most populous counties have the highest numbers of recipients so it is more useful to consider the percentage of the Labour Force in receipt of the payment.  The most recent available county data on the size of the Labour Force is from Census 2016, and although the national labour force has increased since then, the Census data is used here[3] to allow for a comparison of rates by county (Fig 2).

Nationally (using the 2016 denominator), 25% of the labour force were in receipt of the PUP, but 27% of those in the Western Region labour force were receiving it.  There is very significant variation among Western Region counties, with 31% of the labour force in Donegal in receipt of PUP but only 23% of those in Roscommon (the only Western Region county to be below the state average).  Looking at the other AEC counties, Limerick (24%) is also lower than the State but Kerry, like Donegal, is very high (31%).

 

Figure 2: Percentage of County Labour Force (2016) in receipt of Pandemic Unemployment Payment

Source: https://www.gov.ie/en/news/7fc9de-update-on-payments-awarded-for-covid-19-pandemic-unemployment-paymen/  Appendix 2 and  CSO, Census 2016 Summary Results – Part 2. Table EZ011

 

There is no county breakdown available for the Temporary Covid-19 Wage Subsidy Scheme (TWSS) which some unemployed workers receive instead of the PUP and so it is not clear what influence this would have on these figures.  The importance of different sectors for employment discussed in a previous blog, and in turn the different impact of Covid 19 public health measures on various sectors, all affect the level of PUP payments in each county.

 

Reliance on key sectors

The job losses have been largest in sectors where economic activity is difficult or impossible because of public health measures and social distancing guidelines (the recent Working Paper from the DEASP discusses sectors in more detail)   Three sectors, Accommodation and Food Services  (21.3%), Wholesale and Retail (15.0%) and Construction (13.1%) together account for almost half (49.4%) of all those in receipt of the PUP (Figure 3).

 

Figure 3: Pandemic Unemployment Payments – Sector Breakdown, Payment 19th May.

Source: https://www.gov.ie/en/news/7fc9de-update-on-payments-awarded-for-covid-19-pandemic-unemployment-paymen/  Appendix 2

 

This is in line with the most recent CSO Business Impact of COVID-19 Survey 20 April to 3 May 2020 (published 18th May) which shows that 69.1% of enterprises in Accommodation and Food services ceased trading, either temporarily or permanently while two thirds (66.7%) of responding enterprises in the Construction sector had ceased trading either temporarily or permanently as of 3 May 2020.

The Western Region is particularly reliant on these sectors (as shown in Census 2016) with 12.7% of total employment in 2016 in Wholesale and Retail and higher dependency on Accommodation and  Food Services in the Western Region (6.9%) and Construction (5.4%) than the rest of the state (5.6% in Accommodation and Food; 5.0% in Construction).

While the county data for the sectoral breakdown of the PUP is not available, Figure 4[4] is taken from the recent DEASP Working Paper (PDF 1.7MB) which shows the breakdown of the payments in each county for the week ending 17th April[5].  The importance of the Accommodation and Food Services sector in the Region, and along the Atlantic Economic Corridor, is clear.

 

Figure 4: Pandemic Unemployment Payment- Sectoral Breakdown by County

Source: DEASP Working Paper , May 2020 Figure 6 . Apologies for the poor quality. The key sector of Accom & Food is at the bottom (dark blue), Construction is large blue section in the middle and Wholesale & Retail is at the top (orange).

 

The Accommodation and Food sector is most important along the Western Seaboard , this takes in the five counties (Kerry, Sligo, Clare, Mayo and Galway) with the greatest proportion of those claiming the PUP in this sector. In Kerry almost 30% of those claiming the PUP were employed in Accommodation and Food services, along with more than a quarter of those claiming PUP in Sligo, Clare and Galway, and more than 20% in Donegal, Leitrim and Limerick.  Of the Western Region counties, only Roscommon had fewer than 20% of PUP claimants in that sector.  This is in line with its relatively low percentage in receipt of the PUP (Fig 2 above).

 

Conclusion

While there is variation in the impact of the Covid 19 among Western Region counties, the consequences for the Region as a whole are clearly significant.  As discussed previously  the pattern of employment in the Western Region compared to the rest of the state has both positive and negative aspects in this current crisis.  Higher dependence on Accommodation and Food services means more vulnerability but, in the short term, the greater reliance on public service employment can provide more stability and resilience.

As the ESRI noted, there was an almost total decline in certain types of economic activity from mid-March onwards.    With some working in Wholesale and Retail able to return to work this week (18th May), and more expected form the 8th June, we can expect some decrease in the numbers receiving the PUP in the next payment round but Accommodation and Food services such as cafes, restaurants and pubs will main closed longer.  As many outlets, particularly in the retail, food and hospitality sectors, simply stopped trading and in these key sectors remote working was generally not an option, it is not clear how many of these will be in a position to resume trading when the shutdown period ends.

This series of posts brings together new data and previous WDC analyses and examines them from the perspective of the possible impacts of the Covid 19 pandemic on the regional economy.  The posts aim to develop our understanding of what may be happening at a regional level and what will need to be done in the later phases of the public health emergency and beyond, but they are early interpretations and should be viewed as a work in progress rather than a definitive commentary.

 

Helen McHenry

 

The views expressed here are those of the author and do not necessarily represent or reflect the views of the WDC

 

[1] Department of Employment Affairs and Social Protection  Update on Payments Awarded for Covid-19 Pandemic Unemployment Payment and Enhanced Illness Benefit

[2] Covid-19 Enhanced Illness Benefit is also payable and of the 44,600 people medically certified for receipt 6,900 (15.5%) are in Western Region counties. This payment predominantly relates to applications in respect of people who have been advised by their GP to self-isolate together with a smaller number in respect of people who have been diagnosed with Covid-19.

[3] The Labour Force in the State in Census 2016 was 2, 304,037, while the most recent estimates of the labour force, in Q4 2019 from the Labour Force Survey, was 2,471,700, an increase of 167,663 or 7.3%.

[4] Figure 6 in the DEASP Working Paper

[5] Data on county sectors provisional and subject to revision

Remote Working in Ireland During Covid-19 – Initial Findings from WDC/NUIG Survey

Introduction

The WDC in partnership with Whitaker Institute NUIG has just published initial findings of its survey Remote Working in Ireland During COVID-19, see here. These are the summary results from the national survey of 7,241 individuals across a wide range of industries and occupations over a one-week week period in April-May 2020. This is a very high response, well in excess of the number surveyed for the CSO Quarterly Labour Force Survey. The survey was led by Tomás Ó Síocháin and Deirdre Frost at WDC and Professor Alma McCarthy, Professor Alan Ahearne and Dr Katerina Bohle-Carbonell at NUI Galway.

The survey results show that 87% of respondents are now working remotely because of Covid-19. Over half of those surveyed (51%) had never worked remotely before the Covid-19 pandemic. Of those who had never worked remotely, 78% would like to work remotely for some or all of the time after the crisis is over.

Advantages to Remote Working

  • The top three advantages of working remotely were: no traffic and no commute (76%);
  • Reduced costs of going to work and commuting (55%);
  • Greater flexibility as to how to manage the working day (48%).

Over two thirds say their productivity is the same or higher working from home. 37% of respondents indicated that their productivity working remotely during COVID-19 is about the same as normal and 30% report that their productivity is higher than normal.  25% report that their productivity is lower than normal and 9% of respondents indicate that it is impossible to compare productivity as the demand for products/services/business has changed.

Close to half (48%) say it is easy or somewhat easy to work from home while 37% find that it is difficult or somewhat difficult to work from home.

Challenges to Remote Working

The top three challenges of working remotely included:

  • Not being able to switch off from work (37%);
  • Harder to communicate and collaborate with colleagues and co-workers (36%);
  • Poor physical workspace (28%).
  • Internet connectivity is a challenge to working remotely with close to 1/5 (19%) reporting this as an issue, which highlights the importance of the speedy rollout of the National Broadband Plan.

The challenge of juggling childcare with work commitments was cited as a key issue in the open-ended comments received. The provision of better ergonomic equipment is one of the key changes suggested by employees to help with their well-being and productivity while working remotely.

Remote Working in the Future

The majority (83%) indicated that they would like to work remotely after the crisis is over.  Of these:

  • 12% indicated they would like to work remotely on a daily basis
  • 42% indicated they would like to work remotely several times a week
  • 29% indicated they would like to work remotely several times a month
  • 16% indicated they do not want to continue working remotely.

Those with dependent children aged between 6 and 12 years are most likely to want to continue working remotely following Covid-19.

In a recent WDC blogpost, I noted regional patterns in working from home, pre Covid-19, see here. In this survey while a significant majority of workers across all regions want to continue some type of remote working (83%), even more workers in the West (85.7%) and Midlands (86.8%) want to continue the practice.

Just over half (51%) would like to work from their home, with the balance seeking a mix of home, a hub/work-sharing space and the office. The practice of remote work will be important in sustaining regional and rural communities as well as reducing congestion on key routes.

Of the 16% who do not want to continue any type of remote working, there is a higher share of women (17%) compared to 13% of men. There is also a higher share among those without dependent children, indicating that one of the benefits of remote working is that it helps those juggling work and family life.

Further Analysis of Survey Findings

The results presented in the initial report, publicly available here are just the summary findings. Must more extensive analysis is to be undertaken and this will help inform the future policy direction of remote work generally and how remote work can help as we emerge from the Covid-19 restrictions. The following themes will be explored.

  • Geographic analysis of the 19% who indicate internet connectivity as a challenge.
  • Geographic profile of other challenges, advantages and preferences for remote working post Covid-19.
  • Given the extent to which ‘no traffic and no commute’ was expressed as an advantage, analysis of the data on commute times/distances will be useful.
  • Further analysis of the profile of companies where respondents indicate their organisation or line manager would not support future remote working arrangements.
  • Preference to continue remote working by organisational size, age profile, gender, with dependent children or not.
  • Profile of those who do not want to continue remote working post covid-19.

In addition, the WDC would welcome any suggestions for further analysis.

Future Outlook for Remote Working

In a recent blogpost in relation to remote working, I asked What will be the New Normal? see here. I examined trends in the numbers working from home and how the numbers have changed with changing economic circumstances with an indication that there is a correlation between economic growth and employment levels.

One of the trends seems to be that with a tight labour market, and high employment levels, there are greater levels of working from home. More employees seek the opportunity of working from home especially given the longer journey times associated with full employment and congested transport networks. It is also argued that employers are more receptive to the practice, in part related to the need to retain skilled workers.

However, following the crisis, the unemployment rate is likely to be much higher than pre-crisis levels. How will this impact on the demand for remote working? The results from the WDC/NUIG survey indicate that the demand for continued remote work will continue.

Furthermore, in the short to medium term there will be physical/social distance requirements that will likely impact on the numbers who can return to their workplace. So, it is likely that for a transition period at least, there will be much higher levels of working from home than pre Covid-19.

In future blogposts the WDC will highlight findings from more detailed analyses of the WDC/NUIG survey.

 

Deirdre Frost

May 2020

 

The views expressed here are those of the author and do not necessarily represent or reflect the views of the WDC.

Working from Home – What are the Regional Patterns?

Introduction

In a recent blogpost I examined the data on working from home and the trends that have occurred up to the outbreak of the Covid-19 pandemic. The data over the last two decades suggest that there may be a correlation between economic growth, unemployment levels and the numbers working from home. So, for example, as the unemployment rate declined the percentage engaged in working from home increased. When unemployment was at its lowest, in 2019 at 5%, the percentage working from home was at its highest at approximately 20% nationally, see here.

In this blogpost I examine previously unpublished data to see if there are regional differences. Are there regional patterns? Are there different levels of working from home in more urban or rural regions or those regions considered ‘commuter regions’ such as the Mid-East?

Labour Force Survey: Working Sometimes or Usually from Home

The CSO Labour Force Survey asks how often did you work at home. If the response is that you worked for at least one hour from home in the last four weeks then it is categorised as ‘sometimes works from home’. If the respondent reports that ‘At least half of the days worked at home’, then the response is categorised ‘as usually works from home’.

Examining both these groups to capture all those who work from home; nationally over a fifth of the population (21.5%), report sometimes or usually works from home. These data include all sectors (including Agriculture, Forestry and Fishing). Note the data reported in the previous blogpost see here, reported a slightly lower working from home rate of 20%, but this excluded the Agriculture, Forestry and Fishing sector[1].

In 2019, all regions report greater levels of working from home than in 2012, see Table 1 below. In 2019, two regions have levels above the national average (Dublin and the West region), both at 23.9%. This is followed by the Mid-East region (21.4%), followed by the South-East and South West regions, both with 20% working sometimes or usually from home. The regions with the lowest rates in 2019 are the Midland region (19.1%) and the Border region (17.3%).

As noted in the previous blog post, the trend in the national rate had been downward from 2012 through to 2014 with an upward trend in the latter half of the period to 2019, coinciding with rising employment levels and reduced unemployment. This pattern is also generally evident across most regions with the exception of the Midland region which has experienced a continuous upward trend.

Geographic Differences between Sometimes and Usually working from Home

Combining the categories of ‘sometimes’ and ‘usually’ working from home captures all those working from home but a closer look at the data highlights important differences. The chart below depicts those who sometimes and those who usually work from home in 2019 by region. It is clear that there are regional differences. It is also clear that there is a different regional pattern when examining the separate categories of usually and sometimes working from home.

So for example, those regions with the highest rate of sometimes working from home such as Dublin and the Mid-East are those regions with the lowest rate who usually work from home. Conversely those regions with some of the highest rates working usually from home (the Border and Midlands regions) are those regions with the lower rates of usually working from home. The West region is somewhat of an exception here with relatively high rates of both usually and sometimes working from home.

Examining the separate groups in more detail, it is worth repeating the definitions;

  • those who usually work from home are those who report having worked ‘At least half of the days worked at home’.
  • those categorised as sometimes works from home are those who have worked for ‘at least one hour from home in the last four weeks’.

Usually working from home

It is likely that those who usually work from home include those engaged in Agriculture and others who are self-employed and largely home based, for example home-based sole traders and self-employed such as GPs, childminders and construction workers. Previous work by the WDC Policy team have noted the relatively high rates of self-employment in more rural areas. A blogpost on Census data, see here notes the very strong spatial pattern to self-employment with the most rural counties having higher rates than the state average of 15.6%. For example, five of the Western Region counties are in the top ten nationally in terms of share of self-employment, Leitrim (20.3%), Roscommon (19.9%), Mayo (19.6%), Galway county (19.5%) and Clare (19.5%) all having in excess of or close to 1 in 5 of their workers self-employed.

As that analysis notes, the strong spatial pattern of self-employment in Ireland is related to many factors but notably the sectoral and occupational pattern of employment. Apart from Agriculture and Construction, the relative lack of alternative employment opportunities, especially in the more remote rural areas, means that more people choose (or are necessitated) to turn to self-employment. Table 2 below shows the percentage of employment by region, usually working at home over the period 2012-2019.

The data certainly supports the rural/urban pattern with higher rates of those usually working from home in the more rural regions, such as the Border and West regions, while the more urban region of Dublin has the lowest rate of 6.4% in 2019.

The trend nationally has also shown a decline from 2012 to 2016 with an increase thereafter. This suggests that there is also some relationship with higher employment levels and low unemployment rates in 2019. This trend is also clear across every region, albeit with different levels in each, see table 2 above.

Sometimes working from home

Those categorised as sometimes working from home are those who have worked for at least one hour from home in the last four weeks. In 2019 the national average was 13.3%, with Dublin, the Mid-East and West regions having higher than average rates. The lowest rates are in the Border and Midland regions. This suggests that both opportunity (employers who are receptive to remote working) and traffic congestion/ commuting are factors influencing the rate of those sometimes working from home.

The levels of those working sometimes from home (Table 3) is somewhat higher than those working usually from home (Table 2). This is unsurprising as other data suggest that working from home is most common on a one or two-day week basis. For example, the CSO conducted a pilot survey in September 2018 see here. This found that among those at work, 18% declared they worked from home. Working from home 1 day per week was the most popular practice (35%), followed by 2 days a week (13%) and 5 days per week (by 11%).

Data on the impact of Covid-19 and Future Outlook

The most recent CSO data on working from home measuring the current situation due to the Covid-19 crisis, (data only at a national level) shows that, over two-thirds (69.0%) of enterprises indicated that they implemented remote working over the five-week period from 16 March to 19 April 2020. Almost three in every ten businesses (29.0%) had the majority of their workforce working remotely during that period, see here for full release. The practice of enforced home working is likely to change the overall levels of working from home, with huge sections of the workforce experiencing it for the first time.

So, if there is a correlation between economic growth, employment levels and the numbers working sometimes from home, what might happen once we emerge from the Covid crisis?  One of the factors seems to be that with a tight labour market, and high employment levels, there are greater levels of working from home. More employees seek the opportunity of working from home especially given the longer journey times associated with full employment and congested transport networks. It is also argued that employers are more receptive to the practice in part related to the need to retain skilled workers.

However, following the crisis, the unemployment rate is likely to be much higher than pre-crisis levels. How will this impact on the demand for home working? At a sectoral and regional level, if the sectoral patterns of employment are a factor in the rates of those usually working from home, what will the patterns be when we emerge from the pandemic? In future blogposts the WDC will continue to monitor trends and highlight issues as they emerge.

 

Deirdre Frost

May 2020

 

The views expressed here are those of the author and do not necessarily represent or reflect the views of the WDC.

[1] In this special run, it was not possible to provide a sectoral breakdown and examine regional data due to sample size.

 

Business Sectors and Employment in the Western Region: Exploring some potential impacts of the Covid 19 shock

While the detail and scale of the consequences of the Covid-19 containment measures are not yet clear, it is useful to consider, using available data, how the Western Region might be impacted.  There are many unknowns including in relation to the duration of the public health emergency and the speed and extent to which jobs will return once restrictions are lifted.

In this short series of blog posts I look at some of the WDC’s previous analyses[1] of our regional economy and society from the perspective of the potential impacts of Covid 19, so that we can begin to consider areas of priority for support and stimulation when opportunities again become available.  The first post in the series examined sectoral employment data from the perspective of the current economic shock, highlighted key areas of employment in the region and some potential implications of the crisis.

In this post, business demography data on enterprises, and those engaged in these in the Western Region, is examined from the perspective of the current economic shock, highlighting areas of potential vulnerability in relation to enterprises and the people they employ.  The data is from the CSO’s 2017 Business Demography report published last year[2].  This is the most recently available data.

 

Potential economic consequences of the containment measures.

As the Central Bank [3] and others have noted, the economic shock triggered by responses to Covid 19 has resulted in the widespread shutdown of businesses, mainly in the market services sectors of the economy with labour-intensive sectors, such as retail trade, food and beverage activities and accommodation, tourism and travel particularly affected.  These, as is discussed below, are key business and employment sectors in the Western Region.

The widespread restrictions on travel and mobility, along with financial market turmoil, have led to an erosion of confidence and heighted uncertainty[4] which in turn has led to a sharp contractions in the level of output, household spending, corporate investment and international trade.  The OECD notes that within service sectors, activities involving travel, including tourism, and direct contact between consumers and service providers, such as hairdressers or house purchases, are clearly adversely affected by restrictions on movement and social distancing.  Similarly, most retailers, restaurants and cinemas have also closed, although takeaway sales and on-line sales may prevent a full cessation of activity in some businesses.  Non-essential construction work is also being adversely affected.  The OECD assessment estimated that, taken together, the affected sectors account for between 30-40 per cent of total output in most economies.  They estimated that the potential initial impact on activity of partial or complete shutdowns on activity in Ireland would be just over 15% (over a number of years), which is the the least affected of the selected advanced and emerging market economies analysed.

More recently the Stability Programme Update prepared by the Department of Finance outlines that as the economic landscape has fundamentally changed in Ireland and across the globe, Irish GDP could fall by 10.5 per cent this year and Modified Domestic Demand, perhaps the best indicator of domestic economic conditions, is projected to fall by 15 per cent this year.  The labour market will the brunt of the economic shock, going from full employment to a peak unemployment rate of 22% in the current quarter, with annual unemployment rate in 2020 projected to be in the region of 14%.  If recovery in second half of year gains momentum, next year with economic growth is projected to be 6 per cent, and numbers out of work to fall below 10 per cent.  The Update notes that recovery over the second half of 2020 rests on successful virus containment and stresses that the level of uncertainly is such that the projections in the should be considered a scenario rather than a forecast as such.

 

What are key business areas in the Western Region?

Against the background of these economic projections it is useful to examine the type and scale of enterprises in the Western Region, those engaged in these in the Western Region and the sectors the businesses operate in.

The latest CSO Business Demography data on enterprises in the Western Region (2017) shows there were 57,951 enterprises[5] registered in the seven-county Western Region (location of an enterprise is based on its address as registered with Revenue[6]).  In total, more than a quarter of a million people were working for enterprises registered in the region (255,261).

Of all enterprises registered in the Western Region 92.9% were micro-businesses employing fewer than 10 people. This was a slightly higher share than nationally (92.1%). As each micro-enterprise is small in scale however, despite their accounting for 92.9% of enterprises, only 35.8% of those who work for an enterprise, works for a micro-enterprise.  Of course, direct employment is just one of the economic and social impacts of micro-enterprises and they play a particularly vital role in smaller centres and more rural areas, as well as in particular sectors e.g. Construction, Professional Services.

By their nature, larger firms (employing 10 or more people) play a more significant employment role, accounting for 64.2% of everyone who works for an enterprise, despite only accounting for 7.1% of firms.

In terms of the number of enterprises, Construction is the largest sector in the Western Region accounting for 20.4% of active enterprises registered in the region.  Wholesale & Retail (15%) and Professional, Scientific & Technical activities (9.4%) are next largest (see Fig 1 below).  They are also the four sectors (including Accommodation and Food Service (7.8%)) nationally with the most enterprises  but greater concentration in the Western Region is evident with the top three enterprise sectors accounting for 52.6% of enterprises in the Western Region and 49.8% in the State as a whole.  These top sectors, in terms of business numbers include many sole traders and micro-enterprises e.g. construction trades, solicitors, architects, small shops, B&Bs and restaurants and cafes.

 

Figure 1: Percentage of enterprises in each sector in 2017, in the Western Region and State

Source: CSO, Business Demography 2017,Business Demography / BRA18 / Published 2019

 

The picture is different when we look at the number of people engaged in enterprises (Fig. 2)[7], and this is key to understanding the consequences of the current crisis.  Wholesale & Retail is the largest enterprise sector in employment terms (17.8% of all people working in enterprises in the Western Region) followed by Industry (17.2%) which is mainly Manufacturing, and Accommodation & Food Service (13.4%).  These three sectors include many larger businesses e.g. factories, hotels, large retail stores, so account for a greater share of employment than of enterprises.

The Western Region is more reliant on more vulnerable sectors for employment than the rest of the state although there is variation within sectors.  For example, the extent to which the ‘Industry’ sector will be affected is not clear.  The strong med tech sector in parts of the Region may provide some stability in this area.  Likewise, parts of wholesale and retail (food supply) are performing well while other retail trade has ceased.  Nonetheless, as the ESRI noted, many outlets particularly in the retail and hospitality sectors have simply stopped trading, while the fall in consumption and restrictions on international and domestic travel also mean that tourism (Accommodation and Food Service) is likely to collapse over the quarter[8].

The fourth most important sector in terms of employment both in the Western Region and nationally is Health and Social care which will also provide some stability.

 

Figure 2: Percentage of people engaged in enterprises in each sector in 2017, in the Western Region and State

Source: CSO, Business Demography 2017,Business Demography / BRA18 / Published 2019

 

Concentration is more evident in relation to employment with the top four sectors nationally employing just over 50% of those working in enterprises, but they account for more than 60% of employment in the Western Region (and just over 66% in Sligo and almost 64% in Mayo).

Enterprise and employment in enterprise in Western Region counties

There will be variations in the impact of the response to Covid 19 across the Western Region counties, reflecting differences in the composition of enterprise, employment and output.  For example, where tourism or non food retail is relatively important these areas will potentially be affected more severely by shutdowns and limitations on travel.  In contrast, counties with strong med tech industry, greater reliance on agriculture (not covered by this data) or significant food retail may experience smaller initial effects from containment measures.

Looking at the key sectors in terms of enterprise numbers (Fig 3) in the Western Region counties shows Construction, Wholesale and Retail and Professional and Technical services have most enterprises in all Western Region counties and nationally.  As mentioned before, this is in part because of the prevalence of sole traders and very small business in these sectors.  As only essential construction is currently allowed to continue, and most retail (aside from food) is also closed, these businesses are experiencing the immediate shock of the restrictions from the pandemic, and are also likely to suffer from a fall in demand which will follow rising unemployment.  There is also likely to be a fall in demand for many Profession and Technical services in future, but at present a significant proportion of these jobs may be done remotely from home.

 

Figure 3: Percentage of enterprises in key sectors in 2017, in Western Region counties and State

Source: CSO, Business Demography 2017,Business Demography / BRA18 / Published 2019

 

Looking at top sectors for those engaged in enterprises, the importance of the most vulnerable sectors (Wholesale and Retail and Accommodation and Food Service) is clear.  They are in the top four (see Fig 4) in all Western Region counties (and nationally).  While for most western counties Wholesale & Retail, Industry and Accommodation & Food Service are the three largest enterprise sectors for employment, for Galway and Roscommon, Health & Care is in the third biggest employer in the enterprises being examined.

 

Figure 4: Percentage engaged in enterprises in key sectors in 2017, in Western Region counties and State

Source: CSO, Business Demography 2017,Business Demography / BRA18 / Published 2019

 

Industry is the most important sector for employment in Sligo (28.3%) and Clare (18.8%), with Wholesale and Retail particularly important in Mayo (22%) and Roscommon (22%).  Accommodation and Food service is particularly important in Donegal (15.9%) and Leitrim (14.3%).  The Health and Social Care sector may provide some stability especially in counties where it is relatively important (Roscommon (15%) and Galway (13.7%).

 

Conclusion

As the Central Bank noted, when it emerges the pace of recovery is likely to depend on factors such as the extent to which households and firms have been scarred by the downturn, the degree to which precautionary behaviour unwinds, the recovery in employment and incomes and, possibly also, the degree of stimulus in place to provide some impetus to recovery.

Clearly micro-enterprises, which play a very significant role in the Western Region’s enterprise base, are likely to have fewer reserves making them more vulnerable to the cessation of trading.  While enterprises in the Region were hit very hard during the previous recession, there had been recovery, accelerating in recent years. It is to be hoped that recovery in the Region following this crisis will be quicker than that which followed the financial crash.

While there will be some variation in the impact of the Covid 19 restrictions in Western Region counties, the consequences for the Region will be significant.  As the ESRI noted, there has been an almost total decline in certain types of economic activity from mid-March onwards. Many outlets particularly in the retail, food and hospitality sectors have simply stopped trading and in these key sectors remote working is generally not an option.  It is not clear how many of these will be in a position to resume trading when the shutdown period has ended but it is likely that some of these enterprises will not reopen.

Enterprises form the backbone of the local and regional economy.  Supporting the establishment and growth of sustainable enterprises across the Western Region is a key priority for the WDC and we hope that this analysis of enterprise data will help to inform ourselves and other organisations, individuals and policy makers about enterprise patterns in the Region.

This series of posts brings together previous WDC analyses and examines them from the perspective of the possible impacts of the Covid 19 pandemic on the economy.  In the next post on the topic I will look at what we know about regional sectoral output and how it might be affected.  The posts aim to develop our understanding of what may be happening at a regional level and what will need to be done after the public health emergency, but they are early interpretations and should be viewed as a work in progress rather than a definitive commentary.

 

Helen McHenry

 

The views expressed here are those of the author and do not necessarily represent or reflect the views of the WDC.

 

If you are interested in more detailed analysis of the Business Demography data (carried out in 2019), a comprehensive ‘Profile of Enterprise in …’ document is also available for each Western Region county. Each 12-page Profile includes data on:

  • Enterprise Trends 2008-2017: Active Enterprises and Persons Engaged
  • Employees as a % of Persons Engaged 2008-2017
  • Enterprises, Persons Engaged and Employees by Enterprise Size 2017
  • Change in Enterprises and Persons Engaged by Enterprise Size 2008-2017
  • Active Enterprises by Sector in 2017 and Change 2015-2017
  • Persons Engaged by Sector in 2017 and Change 2015-2017
  • Employees as a % of Persons Engaged by Sector 2017

Download the ‘Profile of Enterprise in …’ CLARE, DONEGAL, GALWAY, LEITRIM, MAYO, ROSCOMMON and SLIGOKey Statistics’ for each Western Region county (one page) is also available for download from the WDC.

If you are interested in reading more about the economic impacts of Covid 19 and government responses the ESRI scenario for the rest of the year is here.  The OECD has updated their report Covid-19: SME Policy Responses and has published an Evaluation of the initial impact of COVID-19 containment measures on economic activity.  The Department of Finance published its projections for key indicators in the Stability Programme Update.

[1] Thanks to my former colleague Pauline White for her original data analysis.

[2] https://www.cso.ie/en/releasesandpublications/er/bd/businessdemography2017/

[3] https://www.centralbank.ie/docs/default-source/publications/quarterly-bulletins/qb-archive/2020/quarterly-bulletin—q2-2020.pdf

[4] https://read.oecd-ilibrary.org/view/?ref=126_126496-evgsi2gmqj&title=Evaluating_the_initial_impact_of_COVID-19_containment_measures_on_economic_activity

[5] ‘Total Enterprises’ includes all economic sectors except Agriculture, Forestry & Fishing, Public Administration & Defence, Households as Employers and Extraterritorial Organisations(that is NACE Rev 2 sectors B to N(-642) and P-S).  in the discussion and the charts some of the sector titles have been abbreviated.

[6] The geographical breakdown for enterprises is an approximation. The county breakdown is based on the address at which an enterprise is registered for Revenue purposes, rather than where the business actually operates from.  In particular, where an enterprise has local units in several counties (e.g. a supermarket chain), but one head office where all employment is registered, all its employees are counted against the county where the head office is located.

[7] People ‘engaged’ in enterprises which included both those owning and operating the business as well as those employed by it.  In this post the term employed covers all those engaged in the enterprise.

[8]  Quarterly Economic Commentary Spring 2020

Exploring some potential impacts of the Covid 19 shock on the Western Region – revisiting sectoral employment patterns

The Corona virus pandemic and consequent shutdown is bringing, and will bring, a massive economic shock globally, nationally and regionally, but the detail and scale of the consequences are not yet clear.  There are many unknowns including in relation to its duration, and the speed and extent to which jobs will return once restrictions are lifted.  Nonetheless, it is useful to consider, using available data, how the Western Region may be impacted.

In this short series of blog posts I look at some of our previous analyses of our regional economy and society from the perspective of the potential impacts of Covid 19, so that we can begin to consider areas of priority for support and for stimulation when opportunities once again become available.

Please note that this post was originally published on 30th March, and is being republished now but has not been updated.  The data remains the most recent available and there will be discussion of more recently published analyses of the potential economic, employment and sectoral impacts of Covid 19 in future posts.

An overview of potential national impacts

The Quarterly Economic Commentary  (QEC) recently published by the ESRI (26.03.20) notes that authorities response to the spread of the virus, while absolutely necessary from a general health perspective, will result in millions of jobs being lost globally in the coming weeks and months and a sharp contraction in global economic activity.  They highlight that the swiftness of the economic deterioration is unprecedented in modern times and in many respects exceeds that of the financial crisis[1] (pg 1).

The ESRI examined the impact of the current restrictions on economic life with the assumption that the restrictions are in place over a period of 12 weeks. Under such a scenario the domestic economy would contract by 7.1 per cent and national unemployment increase significantly from 4.8 per cent in February to 18 per cent in Q2 2020 before falling back to just under 11 per cent by the end of the year (pg 2).

In this post I revisit some of the sectoral employment analysis carried out by the WDC insights team in the last few years from the perspective of the current economic shock, highlighting key areas of employment in the region and some potential implications of the crisis.  The data is from Census 2016, collected almost four years ago and while there will have been changes since, it still gives a good picture of sectoral employment patterns in the Western Region.

 

Employment in high level sectors

Differences between the Western Region counties and the Rest of the State[2] in sectoral employment is shown in Figure 1.  In order to make the chart easier to read, some sectors have been grouped together to create these ‘high level sectors’ which give a useful overview of employment characteristics (see foot note for detail of what is included in each high level sector.[3]).

 

Figure 1: Percentage in total employment by high level sector in seven western counties, Western Region and the Rest of State

CSO, Census 2016 Summary Results – Part 2. Table EZ011.  A table is also provided at the end of the post.

Public Services is the largest source of employment in all western counties. It ranges from 32.6% of all jobs in Sligo to 24.6% in Clare.  Public Services includes Health, Education, and Public Administration.[4]  Counties Sligo, Leitrim, Roscommon and Donegal are the four counties in the State with the highest shares of their population employed in Public Services.  In the short term these public sector jobs will provide some employment stability, though employment in the childcare sector, which is included here, has been devastated.

The next largest employment sector in all western counties is Locally Traded Services which includes the three sectors Wholesale & Retail, Accommodation & Food Service, and Transport & Storage.  These sectors are being very significantly affected by the shutdown and may face particular difficulties recovering.

The Western Region is weaker in Knowledge Intensive Services than the rest of the state.  While there will be significant variation, many Knowledge Intensive services (Financial, Insurance & Real Estate, Information & Communications, and Professional, Scientific & Technical activities ) lend themselves to remote working and so employment may be able to continue in this sector during the shutdown.

Industry (largely manufacturing) is the third largest employment sector (see more discussion below).  15.8% of all jobs in Galway are in Industry, with Donegal having the second lowest share (9.2%) nationally.

The relative importance of different sectors varies in the seven western counties, though Public and Locally Traded services are the two largest employers in all.  The dominant role of Public Services in the counties of the northwest shows the relative weakness of private sector activity in the area.  Worryingly, five of the six worst performing counties in terms of employment growth between 2011 and 2016 (the period of recovery from the financial crash), are located in the Western Region.  This vividly illustrates the job creation challenge still faced by the region and the importance of maintaining as many jobs as possible in the next few months.

In terms of the more immediate consequences of the Covid 19 shutdown, the high dependency on public service employment should provide more stable employment in the region in the short term but the lower level of employment in Knowledge Intensive services may make a return to economic growth more difficult.  Some manufacturing, particularly in the medical device sector, may be well placed to benefit from the crisis.

There is more detailed discussion on sectoral employment pattern in Western Region counties in this WDC Insights post.

 

Detailed sectors Western Region and Rest of State

Combining sectors allowed us to see consider the county data more easily.  However, it is important to look at employment in more detailed sectors and their importance in the Western Region to get a better understanding of potential employment consequences.  The two long established patterns of greater concentration of employment (with more employment in fewer sectors) and more reliance on traditional and public service sectors in the Western Region are still evident in 2016 (Fig. 2).

 

Figure 2: Percentage of total employment in each broad sector in the Western Region and Rest of State, 2016

CSO, Census 2016 Summary Results – Part 2. Table EZ011

 

The Western Region’s jobs profile relies more on traditional sectors and public services.  Industry’s share of total employment in the Western Region (13.7%) is considerably higher than in the rest of the state (11%). Manufacturing has consistently played a greater role in the Western Region’s jobs market and this intensified between 2011 and 2016.   The region’s Industry sector has performed very strongly. The high-tech medical devices cluster is a major influence, employing 28% of everyone working in Industry in the region and growing by 30% since 2011.  While many of the jobs in this medical devices sector may be maintained throughout the shutdown, and indeed there is some expansion in response to the crisis, other industrial jobs are more vulnerable.

Agriculture, Health, Education are other sectors that are more important in the region than elsewhere and are ones which are, in the short term at least, less likely to be affected by the shutdown (with the exception of childcare, which is included here).  In contrast, Accommodation & Food service which accounted for almost 7% of employment in the region is likely to lose almost all employment in the short term.

The Knowledge Intensive Services sectors of Financial, Insurance & Real Estate, Information & Communications, and Professional, Scientific & Technical activities are all considerably larger employers elsewhere. Combined, they employ 9.7% of workers in the Western Region, but 16.2% in the rest of the state.

Conclusion

As the ESRI noted (Pg 10), there has been an almost total decline in certain types of economic activity from mid-March onwards. Many outlets particularly in the retail, food and hospitality sectors have simply stopped trading. This will inevitably result in a dramatic increase in the numbers of workers in these sectors being made unemployed. In particular, the wholesale and retail trade and the accommodation and food service activities, which together employed over 65,548 people in the Western Region in 2016 (almost 20% of the 333,919 in employment then), look set to lose a substantial number of workers over a very short period of time.  Supermarkets, some food retailers and pharmacists are, however, increasing employment.

The pattern of employment in the Western Region compared to the Rest of the state has both positive and negative aspects in this current crisis.  Higher dependence on Accommodation and Food services means more vulnerability but in the short term the greater reliance on public service employment will provide more stability and resilience.

Yet the dominant role of public service employment in the region is also an indication of the relative weakness of private sector activity and opportunities.  The region’s slower recovery from the financial crash many mean it is more vulnerable in this crisis

If you are interested in reading more about the economic impacts of Covid 19 and government responses the ESRI scenario for the rest of the year is here.  The OECD has updated their report Covid-19: SME Policy Responses.  Potential business impacts and the pattern of business demography in the Region will be discussed the next post.

 

This series of posts brings together previous WDC analyses and examines them from the perspective of the possible impacts of the Covid 19 pandemic on the economy.  The posts aim to develop our understanding of what may be happening at a regional level and what will need to be done after the public health emergency, but they are early interpretations and should be viewed as a work in progress rather than a definitive commentary.

 

 

Helen McHenry

 

The views expressed here are those of the author and do not necessarily represent or reflect the views of the WDC.

 

 

[1] Quarterly Economic Commentary Spring 2020

[2] Rest of state refers to all counties in the Republic of Ireland except for the seven counties of the Western Region (Counties Donegal, Sligo, Roscommon, Leitrim, Mayo, Galway and Clare.)

[3] Locally Traded Services includes Wholesale & Retail, Accommodation & Food Service, and Transport & Storage; Knowledge Intensive Services includes Financial, Insurance & Real Estate, Information & Communications, and Professional, Scientific & Technical activities;  Public Services includes Health, Education, and Public Administration; Administrative and other services includes a wide variety of services including personal services, sporting activities, creative and other services.

[4] The Health and Education sectors also include substantial private sector employment e.g. private nursing homes, childcare, training providers.  It is not possible to separate this out however.

 

Table of Data from Fig. 1.

Working from Home – ‘The New Normal’?

Introduction

Though unintended, one of the biggest experiments in employment practices is underway globally; enforced working from home. Where possible, Governments have asked that all workers conduct their normal work from home, a radical change from what has gone on before.

What will happen when some degree of ‘normality’ returns? Some commentators suggest working from home will become a much more established feature of working life. Others suggest that life and work will return to ‘normal’, only time will tell. In this blogpost I look at patterns and trends in working from home and remote working up to the Covid-19 pandemic.

The terms telework and e-Work were more common in the past but generally refer to remote working – the practice of using technology (tele-work) and electronic ways (e-Work) to work at a location separate or remote to the office.  Working from home is specifically that and can be considered a subset of remote working, in contrast to working from a shared space such as a hub.

Recent History

Working from home and remote working is not a new phenomenon. As noted in the recently published Government report Remote Work in Ireland (2019), The late 90’s saw the first emergence of Government activity on remote work (then referred to as e-Work or telework). This was due to the increasing availability of ICT and broadband infrastructure. A series of actions were undertaken to promote e-Work (largely working from home).

  • In 1998 the National Advisory Council on Teleworking was established by Government. Comprised of experts across a range of areas it was charged with the task of advising the Minister on telework and related employment opportunities.
  • In 2000, twenty years ago, the Government approved a Code of Practice on e-Working entitled ‘e-Working in Ireland’ and the Programme for Prosperity and Fairness (2000-2002) (PPF) committed the Government to introduce e-Working options into mainstream public service employment by 2002.
  • In 2001-2003, the Western Development Commission (WDC), was represented on the e-Work Action Forum, the successor to the National Advisory Council. The e-Work Action Forum assumed the role of developing tasks and strategies set out in the report, e-Working in Ireland: New Ways of Living and Working.
  • The Department of Finance, in 2003 issued a circular on Pilot schemes to promote e-Working in the Civil Service. Though some individual Departments did introduce pilot schemes and may have continued the practice, no central evaluation or assessment of the policy has ever taken place.
  • The Office of the Revenue Commissioners issued guidance dealing with the tax implications of e-Working for employees and employers which was updated in 2013 and updated further in April 2020 to take account of the current enforced working from home practice under Covid-19.

Environmental impacts

Generally, the earlier work on promoting e-Working focused on economic and social benefits and there was little attention paid to environmental benefits. Before the financial crisis hit, and in line with economic growth, high employment levels and greater levels of commuting, the Department of Transport published its Smarter Travel Policy A Sustainable Transport Future, A New Transport Policy for Ireland 2009-2020 (2009). This included actions to reduce travel demand and traffic congestion.

  • One of the actions was to realise some of the benefits of e-Working. This included setting targets to encourage e-Working in the public sector.
  • There was also an objective to research and develop e-Working centres (in effect the precursor to enterprise centres & working hubs). For example, as part of the smarter travel town initiative, a pilot e-Working centre was established in Dungarvan in 2012. This ‘Remote Working Space’, allows workers to rent space and access broadband while also operating in an office environment closer to home than the office. At that time, Westmeath County Council set up six community e-Working centres aimed at residents who travel to Dublin or elsewhere to work.

However, the financial crash ensured that e-Working as policy objective was relegated and the ensuing higher unemployment, lower employment levels and associated lower congestion levels removed some of the impetus for e-Working.

Employment Trends and Working from Home

The unemployment rate and the numbers working from home rate, as measured by the Labour Force Survey (LFS) is shown in the chart below. The data from the LFS measures those who work ‘usually or sometimes’ from home.

In 2012, the unemployment rate was 16% and the working from home rate was 13.8%.

As the unemployment rate declined the percentage engaged in working from home increased. When unemployment was at its lowest, in 2019 at 5%, the percentage working from home was at its highest, 20%. One of the factors seems to be that with a tight labour market, and high employment levels, there are greater levels of working from home. More employees seek the opportunity of working from home especially given the longer journey times associated with full employment and congested transport networks. It is also argued that employers are more receptive to the practice in part related to the need to retain skilled workers.

The Labour Force Survey is a sample survey and therefore it is more difficult to get detailed regional breakdowns. The WDC uses Census data in order to get a Western Region picture.

Census data on Working from Home

The Census asks the question ‘How do you usually travel to work’? with one of the answers being ‘work mainly at or from home’. While the Census measure is valuable in providing regional data, it is limited in that it only captures those that work from home most of the working week, and excludes those who work from home one or two days per week. More recent data from the CSO (discussed below) suggest one or two days per week is the most common pattern.

Furthermore, the Census definition is inadequate in capturing the extent of e-Work as it includes all those that are self-employed and work from home (such as those engaged in agriculture and home-based sole traders such as GPs, childminders and others across all sectors) and not just e-Workers.  For example, in 2011, 4.7% (83,326) of all those at work, stated they worked mainly at or from home. Of these the most significant occupational group is farmers, fishing & forestry workers, comprising over two fifths (43.5%). Excluding this group, in 2011, the share of the state’s working population reported as working ‘at or from home’ was 2.8% (47,127)[1].

[1] This compares to 3.2% (8,994) of workers in the Western Region, indicating a higher incidence of working from home in the Western Region.

The chart above depicts the numbers ‘working mainly at or from home’ (secondary right-hand axis) and the unemployment rate since the late 1990s up to and including March 2020. This excludes the Covid-19 monthly unemployment figures which was first measured in March 2020. In 1996 there was over 158,000 persons who stated they worked ‘mainly at or from home’. As noted above, a large proportion of this number is those engaged in agriculture. With the ever-declining numbers employed in agriculture it is likely that the agricultural component has continued to decline.

Most recently, there were 94,955 persons who stated they worked ‘mainly at or from home’ in 2016. This was still below the 2006 peak of 105,706, though it represents an increase of 14% between 2011 (83,326) and 2016. Once more the peak in 2006 corresponds to a period of very low unemployment, while the dip in those working from home in 2011 corresponds to a period of high unemployment. Notwithstanding the caveats with the data there does seem to be a relationship between employment, unemployment and the extent of working from home.

CSO 2018

More recently, the CSO invited submissions to the consultation on questions for Census 2021. The WDC advocated for the inclusion of a question to more effectively capture the extent of Working from home/e-Working to which the CSO agreed. The CSO conducted a pilot survey in September 2018. This found that among those at work, 18% declared they worked from home. The level of non-response among workers was low at 3%. Of those working from home, the breakdown by number of days was as follows:

Working from home 1 day per week was the most popular practice (35%), followed by 2 days a week (13%) and 5 days per week (by 11%). It should be noted that 26% of those who said they worked from home did not state the number of days. One possibility may be that their pattern changes on a weekly basis.

Profile of those working from home

  • The CSO pilot results showed that the percentage of those working from home increased as age increased, peaking at 19.6% of those at work in the age group 45-49. Of this group 32% worked one day from home. The proportion of home workers decreased among workers in older age groups.
  • Over half of those who worked in ‘Computer programming, consultancy and information service activities’ indicated that they worked from home. This industry comprised 3% of all workers in the pilot but 11% of all home workers were in this industry. See the CSO release here.

IBEC collects data on the extent of e-Working (largely working from home) based on a survey of their membership. The most recently published data (for 2018) shows an increasing prevalence of the practice. For example,

  • In 2018, 37% of IBEC members (152 companies) had a practice of e-Working/home-working, on one or two days per week basis, up from 30% (110) in 2016.
  • The likelihood of e-Working among IBEC companies increases with company size, 54% of companies with 500+ employees cite a practice of e-Working 1 or 2 days a week.
  • There is a higher rate of e-Working among foreign owned companies compared to Irish, 40% and 33% respectively, and both these figures are up on two years previously – 34% and 27% respectively.
  • Sectorally the highest rates of e-Working are within the Electronic services sector (69%), followed by the Financial services sector (58%).
  • At a regional level IBEC members in the Dublin region have the highest incidence of e-Working, with almost half (49%) reporting having an e-Working policy of 1-2 days working from home per week. This rate drops to one-third of companies in the Cork region, one-quarter in the Mid-West and South-East and 24% in the West/North West. This regional variation supports the idea that at least some of the e-Working demand and take-up by employers is driven by the greater extent of congestion in larger urban centres.

What will be ‘The New Normal’?

So, if there is a correlation between economic growth, employment levels and the numbers working from home, what might happen once we emerge from the Covid crisis?

It is very likely that the ‘enforced’ working from home experience will have created an appetite and interest to continue the practice, by both employers and employees. The extent of this will depend on how suitable the work and role is and how effective the supports for employees working remotely has been. Some employers may find that they are pleasantly surprised with how its worked and will be receptive to continuing the practice, others may find the opposite. It is worth noting that the draft document for Government between Fiánna Fail and Fine Gael propose that public sector employees move to 20% home and remote working in 2021.

It is also likely that we will have a higher rate of unemployment than before the Covid pandemic and as with the aftermath of the financial crisis, with lower employment levels, congestion levels on public transport and road networks may drop considerably. However, the current circumstances are unprecedented and it is possible that any correlation with working from home and high unemployment will not apply while the various restrictions remain in force.

There are some differences in the context now and what prevailed in the late 1990s and early 2000s, which will likely impact on ‘the new normal’.

  • Technology is even more advanced with videoconferencing easily available and this can be useful for employers and employees in maintaining and promoting the remote working relationship.
  • Before the pandemic, working from home has become a feature of some company’s business models, illustrating that companies can operate very successfully with all staff working remotely (e.g Shopify, Wayfair)
  • The Covid pandemic forced a huge section of the workforce to engage in working from home, and in effect to trial it, albeit under rushed circumstances. While unintended, this provides a mechanism for much of the labour market to experiment working in a new way.

The most recent data[1], suggests that up to one fifth of the workforce work from home on at least a 1 day a week basis. This could be considered ‘the normal rate’ up to the occurrence of the Covid pandemic and under conditions of strong economic growth and close to full employment.

The LFS to be published in August will have additional data on the impacts of the pandemic including figures measuring the current extent of working from home.

However, as the restrictions are slowly lifted the numbers working from home will decline from their current peak and over the next few months and beyond the level of ‘the new normal’ will begin to emerge.

The levels of working from home may well be influenced by the extent to which the economy can recover relatively quickly or whether we enter a longer recessionary period. Either way ‘the new normal’ may not become clear for another year or so.

In the meantime, the WDC will continue to monitor trends and highlight issues as they emerge. As part of this work the WDC is collaborating with NUIG to gather the experiences of those working from home at this time and the findings will be discussed in a future post.

 

Deirdre Frost

23 April 2020

 

The views expressed here are those of the author and do not necessarily represent or reflect the views of the WDC.

[1] CSO Pilot September 2018

How are we doing? Changes and Trends in County Incomes in the Western Region

The CSO released data on County Incomes and Regional GDP for 2017 last month (along with preliminary figures for 2018).  In this post changes in disposable incomes per person in Western Region counties incomes in the Western Region are examined with a particular focus on the differences among counties and the changes over time.  Regional GDP will be considered in a forthcoming post.

It should be remembered that the ‘Household Disposable Income per person’ discussed in this post is calculated at a macro level and the county data is most useful for comparison among counties and over time.  Indeed the CSO notes that “While the county figures involve uncertainty, they do provide a useful indication of the degree of variability at county level.”

The map from the CSO below gives a quick overview of Household Disposable Income per person in 2017.  It shows, unsurprisingly, that the highest disposable incomes are in the east and south, while counties in the west and north have the lowest disposable incomes. The highest disposable income per person is in Dublin which, along with Kildare, Limerick, Wicklow and Meath, had per capita disposable income greater than the state average in 2017 while Cork, Tipperary, and Westmeath were just below (see Figure 1 below for more detail).

Source:  CSO, 2019, County Incomes and Regional GDP 2017

 

A summary of key data for Western Region counties is provided in Table 1 below.  The data for 2017 can be regarded as more robust than the 2018 estimates and so it is used for most of the comparisons in this post.  In 2017, disposable income per person in the Western Region was €17,856 in 2017 and in 2018 it is estimated to have increased to €18,007 (the Western Region figures were calculated using inferred populations).

Table 1: Disposable income data for Western Region counties

*CSO Preliminary Estimate for 2018.  ^Own calculations

Source:  CSO, 2020, County Incomes and Regional GDP 2017  and CSO Statbank Table CIA02

 

Disposable income per person in Donegal has been consistently the lowest in the region (and nationally) and estimates for 2018 show a small decline in incomes in Donegal (-0.7%)  and Leitrim (0.3%) between the two years.  Disposable Incomes in Donegal in 2017 were only 76% of the state average.  Only two Western Region counties (Galway and Clare) had disposable incomes of more than 90% of the state average, while Sligo had a disposable income of 89% of the state average. Incomes were 84% of the state average in Mayo and Roscommon. The Western Region as a whole had a disposable income per person of 86% of the state average in 2017.

The most significant growth between 2017 and the 2018 estimate was in Clare (1.9%) with income in Galway growing by 1.8%.  For the Western Region as a whole, per capita disposable incomes showed a growth of 0.8%.  Disposable income per person in the state was €20,714 in 2017 and is estimated to have grown by 3.8% to €21,495 in 2018.  As noted, however, the 2018 data is estimated[1]. Household Disposable Income per Person in Dublin is estimated to have grown by 6.8% and by 8% in Laois, 7% in Westmeath, 6% in Offaly and 5.3% in Kildare.  It is estimated to have fallen in Wexford, Leitrim, Cavan, Monaghan and Donegal.  The differing growth rates among counties are giving rise to increasing regional imbalance.

Disposable income per person for all Irish counties is shown in Figure 1 below.  As mentioned, disposable income per person in Donegal lowest in the state while Roscommon and Mayo have the next lowest.  In contrast, Galway had the twelfth highest disposable income per person, with Clare in fourteenth place.  The highest disposable incomes nationally are in Dublin, Kildare and Limerick.  These, along with Wicklow, Meath and Cork, all had Disposable Income per person of more than €20,000 per annum.  No Western Region county had a disposable income of more than more €19,000 per annum.

Figure 1: Disposable Income per Person for all Counties, Western Region and State, 2017.

Source:  CSO, 2020, County Incomes and Regional GDP 2017

 

Trends over Time

It is also interesting to look at changes in disposable incomes over time.  Figure 2 shows trends in disposable incomes in the Western Region between 2008 and 2018.  All of the counties show the rapid decline from the 2008 peak followed by varying rates of recovery.  There was a small peak in 2012 followed by a fall in 2013 which related to a decline in social transfers as discussed here.  Galway consistently had the highest income in the region (with the exception of 2011 when Leitrim was highest).  In contrast, disposable incomes in Clare had fallen to the 3rd lowest in the region in 2011 but have shown steady recovery since then and currently disposable incomes are second highest in the region.

Nationally, by 2017 seven counties [2] had returned to the income levels of 2008, but none of these was in the Western Region where no county had a higher Disposable Income per Person in 2017 than it did in 2008.  The estimates for 2018 suggest that 11 counties will have disposable incomes above the 2008 peak, but again, none of these is in the Western Region.

 

Figure 2: Disposable Income per Person for Western Region Counties 2008-2018 (€)

Source:  CSO, 2020, County Incomes and Regional GDP 2017

 

Disposable Incomes in the Western Region compared to the State

When considering how counties are doing it is interesting to look back over a longer period, with data comparing counties to the state average available back to 2000 (Fig 3).  While Figure 2 shows the Disposable Incomes per person, when considering the trends among counties it is helpful to use indices, so that county figures can be examined relative to the state (State=100).  Thus Figure 3 provides a contrast to the more positive trends indicated above in Figure 2 which showed growth in disposable incomes in Western Region counties, particularly between 2014 and 2016.  Growth rates in the Western Region were lower than for the state as a whole and so Figure 3 shows that Disposable Incomes in Western Region counties are declining relative to the state average.

The gap between counties in the Western Region and the rest for the most part narrowed (i.e. they got closer to the state average) during the boom period and into the slowdown.  In fact, regional divergence was least in 2010 when all parts of the country were significantly affected by recession.  Galway and Leitrim were the only Western Region counties to have a disposable incomes of higher than the state average during the period 2000-2017 (Galway in 2009 and 2010 and Leitrim in 2010) .  Since then, it is of concern that all Western Region counties, except Sligo, have declined relative to the state index of disposable income per person.

 

Figure 3: Index of Disposable Incomes per person in Western Region counties 2000-2017, State=100

Source:  CSO, 2020, Statbank Table CIA02

 

Although disposable incomes in most Western Region counties was lower relative to the state in 2017 than in 2000, the pattern of change has varied among counties.  Perhaps most significantly, the index for Clare was 96.5 relative to the state (100) in 2000 but by 2017 it had fallen to 90.5, though this was showing significant recovery on a low point of 88.9 of the state average in in 2015.

Roscommon (92.0) and Mayo (92.2) were in a similar position relative to the state in 2000, and both have declined significantly since then (Roscommon, 84.0, Mayo 84.2) though the pattern for both over time was different.

Sligo is the only Western Region county to have improved relative to the state between 2000 (88.9) and 2017 (89.1) though the difference is small, down from a peak of 95.5 in 2012.  Similarly, Leitrim had only a very small change between 2000 and 2017 (87.9 to 87.5) but it had peaked at 100.6 in 2010.

Galway, which is often considered to be the engine of the region, also declined relative to the state, despite good performance to 2010, and having started in 2000 with an index of 94.2 relative the state, by 2017 it had fallen to 91.7, though this was the highest in the Western Region. Finally, the index of disposable income per person in Donegal, having started from a low base (81.4) continued to decline over the period to 75.6 in 2017 and has remained the lowest in the state during that period.

 

Ranking of counties

Another way to look at how the Western Region counties are doing is to compare them to other counties and rank the relative positions.  In Figure 4, the rank of the Western Region counties is shown for four years (2000, 2006, 2011 and 2017).

Figure 4: Rank of Disposable Income per Person in Western Region among all counties

Source:  CSO, 2020, Statbank Table CIA02

 

Between 2000 and 2017, in the Western Region only Sligo (from 19 to 18) and Leitrim (from 21 to 20) improved their position relative to other counties, though Leitrim had experienced greater improvement in 2006 (ranked 11) and 2011 (ranked 8).  There was significant variation in Sligo, falling as low as 22nd in 2006 and rising to 13th in 2011.

Galway did not vary significantly across the period (from position 11 in 2000 to 12 in 2017) while incomes in Clare, according to this measure, fell from 8th place in 2000 to 14 in 2017, having been as low as 17th in 2011.

The most significant changes were in Roscommon and Mayo which started in 13th (Mayo) and 14th (Roscommon) positions, but have fallen to the bottom three with disposable income per person in Mayo ranked 24th, Roscommon ranked 25th in 2017.  Donegal has had the lowest disposable income of all counties for the whole period.

 

Conclusion

The relative declines in disposable incomes in Western Region counties is of concern.  While incomes in the Western Region have grown, they are not increasing at the same rate as other counties.

Last year the CSO released Geographical Profiles of Income in Ireland 2016, a new, very comprehensive report on incomes in Ireland which provides data at both county and Electoral Division (ED) level (discussed in a WDC Insights blog here).  In addition, new data Earnings Analysis Using Administrative Data Sources (EAADS) provides statistics on earnings at county level (findings for the Western Region are discussed here).  This data, along with the Geographical Profiles of Income and the County Incomes data) gives us an opportunity to triangulate different data sources and gain a better understanding of patterns in earnings and some of the factors contributing to income differences in the region.

Having this data at county level will allow for a more nuanced understanding of the income situation and trends in the Western Region.  I hope to have the opportunity to explore these further in the near future.

 

This post has provided a brief overview of the key County Income figures for the Western Region based on the recent CSO release.  The growth and change in the regional economies as shown by the Regional GVA data will be examined in the next post.

 

 

Helen McHenry

 

[1] There can be quite significant variation between the preliminary and final figures.

[2] Limerick, Wicklow, Dublin, Kildare, Kerry, Westmeath and Tipperary

Submission to the Review of Sustainable Mobility Policy

The WDC recently made a submission to the Department of Transport, Tourism and Sport (DTTAS) consultation on the Review of Sustainable Mobility Policy and associated background papers.

One of the functions of the WDC is regional policy analysis.  The WDC seeks to ensure that government policy reflects the needs of, and maximises the potential of, the Western Region[1] in such areas as infrastructure, natural resources, enterprise and regional and rural development.  It also tracks the implementation of policies and recommends adjustments as appropriate.

As the Western Region is very rural[2] the WDC submission has a particular focus on the needs of, and opportunities for, more rural and peripheral areas.

The Sustainable Mobility Policy consultation was organised around a number of specific topic issues with background papers prepared by DTTAS for each of these.  In this post some of the key points made in the submission for each topic are highlighted but the full submission can be read here.

Active travel

Active travel tends to be less popular in rural areas and in smaller urban settlements.  There are a number of reasons for this, including:

  • The need to travel longer distances to employment or services
  • A lack of walking and cycling facilities
  • Motorised transport travelling at higher average speeds giving rise to concerns about personal safety
  • Greater exposure to wind and rain
  • Lack of artificial lighting meaning that many journeys are difficult in the hours of darkness
  • Finally, less congestion and more predicable travel times in rural and small urban areas also reduce the incentive to walk or cycle.

Despite these issues Active Travel options should be more available and promoted in rural and small towns so that the proportion of active journeys is increased to the benefit of both the individual travellers and the wider community.

Normalising walking and cycling as viable travel options in rural areas is important.  They shouldn’t be considered unusual, risky or the preserve of a small minority.  This normalisation will of course occur as participation increases, but also as the infrastructure for active travel is increased and the options are more visible and safer.

 

Climate Change Challenge 

Addressing the decarbonisation of transport and travel in rural regions is complex. Rural people are more reliant on car based transport, they have less available public transport and tend to travel greater distances.  Rural dwellers’ transport and travel patterns need to be central to our Sustainable Mobility Policy.

The rural nature of the Western Region has implications for how we reduce transport emissions, but the reasons we travel are also very important, both in terms of options for reducing journey numbers and types, and the distances and nature of the journeys.

The three pronged ‘Avoid, Shift, Improve’ (ASI) framework is a hierarchy that emphasises reducing journeys in the first place, achieving modal shift, and improving mode efficiencies[3] and should be used for rural transport planning.  By thinking of each of these (ASI) in relation to rural journeys we can begin to focus on workable solutions

The WDC is currently engaged in a project on the transition to a low carbon economy in the rural Western Region (under Action 160 in the Climate Action Plan) and transport is one of the key elements under consideration.

 

Congestion

The costs of congestion are significant and varied, impacting on efficiency, economics and societal and individual wellbeing. Within the Western Region the larger towns and Galway city are particularly affected. It is important that congestion is eased, both to reduce the economic and social costs being incurred, and also to ensure the Region and its growth centres can deliver on the ambitious regional growth targets set out in Project Ireland 2040.

Within the Western Region, congestion in Galway city is of most concern.  The Galway Transport Strategy has identified various sustainable mobility measures which need to be expedited. Funding from national Government must be made available to ensure speedy delivery.  There needs to be an expansion of commuter rail services on the existing Athenry-Oranmore-Galway city route. This will relieve congestion and help promote other sustainable transport (walking and cycling) within Galway city. Investment is needed to double track this line, provide passing bays in the short term and procure additional carriages.

Regional towns will need support and investment in devising and activating sustainable mobility town plans. Support from the expertise available within the NTA and local authorities should be made available.

The WDC has been active in the area of remote working (previously termed e-work and telework) for many years, researching the practice, as well as operating an e-work policy for over two decades. We have published various papers including a recent blogpost which identifies the most recent evidence which suggests that that 18% of workers declared they worked from home.  See the blogpost for more detail.  The success of initiatives variously called e-working spaces/ co-working spaces/ hubs also suggests e-working is on the increase. These can provide similar benefits to home working in reducing commuting distance and congestion.

 

Land Use Planning and Transport Planning

The integration of land use and planning is important in generating more sustainable mobility.  Many people working in congested centres, especially Dublin, have to endure long commute times. If more employment was located in regional centres then it is likely many would have shorter commute times, with much less investment and funding required to ease congested networks in the Greater Dublin Area for example.

One of the important contributory factors to the recent and current pattern of development is the focus on transport investment to and from the capital with relatively minimal investment in other inter-city routes. Some of the current congestion or ‘over development’ of Dublin is in part a legacy issue relating to the priority given to improving the radial road links (and rail links) between the provincial cities and Dublin which ensured that Dublin was the most accessible city while at the same time there were relatively very poor intraregional links between each of the other cities, stifling development within and between the other regions.

 

Regulation of Public Transport

The remit of the National Transport Authority (NTA) which confers additional responsibilities within the GDA should not be confined to the GDA but should be extended to the entire country. The particular additional responsibilities allow the NTA to more effectively deliver on the transport needs of the GDA and this overall, comprehensive role is needed throughout the country.

Given the role of the NTA in delivering the Rural Transport programme, the investment programme in regional cities, the accessibility programme, and other transport programmes, it already has a significant role and understanding of transport issues outside the GDA. What is needed is the capacity to deliver overall strategic direction so as to enhance and integrate services across the country and beyond the GDA.

The background document notes that the majority of bus and rail services are PSO routes. These are ‘financially unviable services which are provided as a public good’. In this discussion it would be useful to note that this is not unusual, that most public transport services arose Europe are in receipt of public funding. The services provide wider economic benefits which are often not quantified but are no doubt significant.

 

Public Transport in Rural Ireland

Rural areas (depending on the definition used) can include some significant towns which have different transport patterns and needs to the more sparsely populated rural areas.  It is important that these differences are recognised in planning for rural transport and that one approach is not assumed to cover all rural issues.

Most journeys are made to reach services of varying kinds.  People living in rural areas tend to be at a greater distance from services than their urban counterparts and so the journeys made tend to be longer and more car based and of course those without access to a car are particularly disadvantaged.   Greater distance to services tends to reduce options for travel and in particular, given the lack of public transport and the distance to public transport services, increases reliance on car travel in rural areas[4].  There are opportunities and challenges in providing public transport in rural areas, some of which are noted here:

  • Existing public transport like school bus services and other transport services (health) should be open to all rural dwellers, making the most of the existing services.
  • Where a service exists bus stops, signage and information  should be available including covered bus shelters (discussed more in the Active travel section of this submission)
  • Bike parking stops which is secure and dry should be provided at rail stations and key bus (discussed more in the Active travel section of this submission)
  • An Information app on availability/ timing would be useful. Sometimes it can be difficult to find information about an existing service or predict when it might arrive.
  • If a phone service is used to provide information about the transport service or to allow for demand response this needs to be staffed daily ideally from 7am to 7pm. If you cannot rely on being able to contact the service to book  or check timing the service will not be used to its potential.

 

Statistics and Trends

There seems to be a shortage of data on public transport provided by private operators.  These account for a significant proportion of scheduled services between cities and towns in the Western Region but there is little data on passenger numbers, frequency etc.  This can sometimes lead to underestimation of the use of public transport not provided by Bus Éireann or Irish Rail.

Many journeys are multi modal, and yet there is very little information on such journeys with the main mode often being the only information gathered.  Better data on multi modal journeys would allow for infrastructure and services to be planned taking it into account.  Similarly, with better understanding of the roles of different modes in different journey types, the more sustainable modes can be encouraged as elements of a journey.

 

Priorities

There has long been a focus on sustainable travel in Dublin, but less focus on other cities (e.g. Galway) and other urban centres (such as Sligo and Ennis).  Likewise in small towns it is not prioritised or is included as an add-on.  Solutions may not be well designed or not attractive to users or may not be integrated so that they are not practical for users.  Finding out what works in smaller urban centres and making good investments is important.

There is a dearth of sustainable travel options and solutions available for rural areas, and if we are to reduce the carbon intensity of rural travel there needs to be a clear focus on finding solutions in rural areas, piloting infrastructural investments in rural areas and small towns and trying novel approaches to encouraging sustainable travel.  We need to find out what works in rural areas in relation to lift sharing, public transport use and active travel so potential solutions can be developed, then tested, learned from, and put in place elsewhere.

 

The full submission from the WDC is available here.

 

Helen McHenry

 

[1] There are seven counties under the WDC remit Donegal, Sligo, Leitrim, Mayo, Roscommon, Galway and Clare

[2] Using the CSO definition 64.7% in of the population live outside of towns of 1,500 or more. Using the definition in Ireland 2040 the National Planning Framework, 80% of people in Western Region live outside of towns of 10,000.

[3] See more discussion in the NESC paper Advancing the Low-Carbon Transition in Irish Transport

[4] Discussed more here https://wdcinsights.wordpress.com/2019/12/20/why-do-we-travel-distance-to-rural-services-and-the-need-for-rural-journeys/

Challenges and interventions for transitioning to renewable heat in rural homes

To reduce the carbon footprint of our rural homes, the decarbonisation of the energy used for heat is essential. We have to switch to renewable energy, either electrical (generated from wind, solar or in future ocean energy) or bioenergy (e.g. solid biomass, biogas or liquid biofuels). Some of the options for renewable heat were outlined in the last blog post. The barriers associated with this switch to renewable heating are discussed here along with potential areas for government intervention to accelerate change.

The focus, as previously, is on the existing housing stock in rural areas, especially those which will be very expensive to make suitable for effective use of heat pump technologies. As most of the rural Western Region is not on the natural gas network, issues associated with this network are not discussed here.

 

Barriers

The barriers to installation of low carbon heat systems[1] broadly fall under the following headings:

  • economic
  • technological
  • locational
  • informational

Economic

The high capital cost of many renewable heat systems is an important barrier to their installation. In general it is cheaper to replace a traditional oil[2] boiler with another oil boiler, even though this is also an expensive purchase. The capital cost of purchasing and installing a heat pump is greater than installing a replacement oil boiler and increases as heating demand increases (as larger units are required). Indeed, as energy efficiency upgrades are likely to be required to ensure the heat pump can be run efficiently, capital costs will probably be even greater. Similarly the capital cost of a biomass boiler (using logs, chips or pellets) is greater than that for an oil boiler. Finding the money to invest in any boiler is difficult for most people, so the barriers to purchasing more expensive renewable energy options are significant.

Of course, capital costs are only one element of the decision, running costs are the other factor. Running costs include both fuel costs and maintenance costs.   Heat pumps in well insulated homes are cheaper to run than oil boilers, and the savings over time are a key incentive to installation and shortening the payback period[3]. Similarly, biomass is usually a cheaper fuel than oil depending on the type being used and the current oil price.

Given the higher cost of installation, incentives are needed to promote the use of renewable energy heat systems but even with current grants there are very substantial upfront costs. Often the potential reduction in running costs is not sufficient to encourage most consumers to make the initial move to low carbon heat. Furthermore, some rural homes which require substantial energy efficiency improvements may never find it economically feasible to install heat pumps as the larger capital expenditure is unlikely to be compensated by lower running costs. This particularly likely to be the case in older homes with ‘hard to treat’ features such as solid wall construction, stone built, solid floors, no loft space, or sash and case windows.

Nonetheless, there needs to be a clear policy for decarbonising such homes as the carbon tax increases. If there is a ban on installation of fossil fuel boilers in existing homes people could be left with no realistic alternative. Even where homes are suitable for retrofit, a subsidy will be required to achieve a positive ‘whole life’ economic benefit.

 

Technological

Not all renewable heating technologies will be suitable for every home. It is important that information on the advantages and limitations of each technology is available for different home types and that people can easily access that information in a format relevant to them. Installation of the wrong types of heating system in the wrong places can give unfamiliar technologies a bad reputation. There are a variety of technologies which may be used in the transition to renewable heat and it is important that information is available about them all, highlighting the types of homes where they may be suitable or not suitable.

The Climate Action Plan focuses on heat pumps as the key domestic renewable heat technology, but the move from high temperature fossil fuel heating systems to lower temperature systems requires deep energy efficiency retrofit or the heat pumps will not be able to keep the home at a comfortable temperature and will be expensive to operate. Biomass boilers (using logs or pellets) are an alternative high temperature heating system which may be suitable in some rural housing but sourcing quality fuel, keeping it dry and maintaining the boiler appropriately (including emptying ash) can be barriers to this technology. Smart storage heaters or other electrical heating are also alternatives, but may be expensive to run and might not be suitable where all day heat is required.

Location

Location can act as a barrier to certain technologies in rural areas. Low housing density and a dispersed population mean options such as heat networks are not viable in most rural areas. Nonetheless some towns and villages in the rural Western Region may be suitable for small heat networks. Work in Scotland[4] has noted the potential for heat networks at small scale where alternative solutions are technically or financially prohibitive, or where there are co-benefits from implementation, such as providing high-temperature heat for industry. It may be, however, that when compared with the cost of deep retrofit of individual dwellings the installation of heat networks becomes more financially favourable.

Aside from the issue of density, rural locations can increase costs of installation and make it more difficult to achieve economies of scale in the provision of low carbon heating systems It can also be more difficult to find appropriately skilled installers in an area while lack of competition as well as increased transport and servicing costs also act as barriers. Being part of an Sustainable Energy Community (SEC) would help with this.

 

Information

Most people do not think very much about their home heating system as long as it is working. While there may be increased consciousness among some about their carbon footprint, understanding how home heating impacts on carbon emissions is not a priority for many. People are unlikely to change a system that is working for them. Nonetheless it is important that there is easily accessible information about low carbon home heating options so that people may gain a background knowledge, even if they do not immediately make any change. This helps to normalise the concept of low carbon heat and means that when consumers are at key trigger points such as house moves, refurbishment or failure of an existing boiler or system they will consider low carbon heat options, or at least will be aware that they should consider them. The disruption caused by changing heating systems is sometimes considerable and this is an important barrier to change and so changes are most likely at these trigger points.

At these times consumers need access to high quality, detailed, impartial information and advice. They will have more focused questions and a more urgent need to understand their choices. Provision of robust, impartial information at these points can make a significant difference. Heating installers can have a particularly important role here as a large proportion of replacements made through ‘distress decisions’ following failure of the existing system. People who trust their boiler repair agent will rely on them for information and advice. Thus, training for installers on low carbon heating options is key, but as many will have a strong preference for one technology type or a connection to a particular manufacturer it is important that the consumer knows where to get other advice on renewable heat options.

Some of the possible barriers to the transition to low carbon heating systems have been discussed briefly here. It is important to keep them in mind when considering how to drive the transition. The SEAI Behavioural Economics Unit has been studying barriers and ways to encourage change in some depth, read more about it here.

Government intervention

Given the barriers outlined above, government action is required to drive the transition to low carbon heating and significant government targets and actions are included in the Climate Action Plan. The types of actions which can be used may be categorised under the following headings:

  • Regulation
  • Finance: Taxes and Incentives
  • Advice and information

Regulation

Regulation can drive change, in areas such as fuel type and specification, boiler installation and building regulations. It can also address fuel quality standards (e.g. for biomass fuels) or liquid biofuel blends as well as setting standards for building quality, energy efficiency and energy use. For example, building regulations introduced in November 2019, require all buildings to be Near Zero Energy Building (NZEB) and existing buildings which are being renovated across more than 25% of their ‘building envelope’ must improve energy efficiency performance to an equivalent of BER B2 (or cost optimal equivalent). Likewise, regulation of the allowable moisture content in firewood for sale and in the standard of wood boilers and stoves which can be installed, would reduce emissions improve air quality.

Under the Climate Action Plan the installation of oil boilers in new dwellings will be effectively be banned from 2022 and gas boilers from 2026 through the introduction of new regulatory standards for home heating systems. A review is also being undertaken to consider how and when the replacement of oil and gas boilers with renewable energy in existing dwellings can be commenced so that new oil and gas boilers will not continue to be installed.

Alongside this type of regulation, it will be important to ensure that there are effective alternatives available to rural homeowners and landlords at reasonable cost, and that there is a planned programme of change to avoid either requiring early replacement of boilers or encouraging a spike in sales of fossil fuel boilers in advance of any ban being introduced.

In addition, as with all regulation, effective enforcement will be essential to ensure they work and are fairly applied.

Taxes and Incentives

There is a commitment to increase the carbon tax to at least €80 per tonne by 2030; this is likely to involve increases at a rate of €6 per tonne per year to 2030. This should incentivise the take up of low carbon heating alternatives and energy efficiency improvements and will improve the payback periods for such investments. However, it is important that there are appropriate, affordable alternatives to carbon intensive systems, otherwise people will be facing the higher cost of fossil fuel without an option to change. Furthermore, it should be recognised that while a high carbon tax will drive a move to lower carbon systems. It most affects those on low incomes who can least afford to change and at the same time it also increases the incentives to operate outside the formal economy.

Grants, low interest loans and repayment of loans through energy bills are all possible support methods to increase investment in retrofit and low carbon heating solutions. The Climate Action Plan outlines the steps to be taken to develop a new delivery model for energy efficiency upgrades. (Actions 47-49). This is welcome but much of the focus seems to be on energy efficiency rather than on low carbon heating systems. While energy efficiency is, of course, important there is little in the Plan on potential supports or incentives for older buildings or ‘hard to treat’ buildings, many of which are in rural areas. This may mean that changes in these buildings will be slow or will not take place despite regulation and increased taxation.

Delivery structures and funding options for an area based residential retrofit programme will be identified this year (2020). When these are known it may then be clearer how rural dwellers will be supported in the move to low carbon systems.

 

Advice and information

The final key element of government intervention involves objective and reliable advice and information for people about lowering their carbon emissions and moving to low carbon systems. This is largely the responsibility of SEAI and there is significant information available from them (https://www.seai.ie/ ). The information available has been developed over the past few years, and is of course very welcome but it could be further expanded.

There is a need to provide clearer guidance on the options for older buildings, listed buildings and conservation areas, and remoter rural dwellings based on research on best practice and real-world experience.

There is also a need for clearer information about the full costs associated with deep retrofit and information about cost savings which takes account of actual heat use in a poorly rated home before retrofit and the costs following retrofit when the home should be warmer. It is important that the economic benefits are not over stated.

The development of a Sustainable Energy Community approach with local energy Master Plans has been very successful and can make good use of local knowledge in tailoring the use of different heat technologies to local circumstances as well as informing communities about their options and giving them the chance to particulate in the transition. There is potential to have further cooperation between local government and industry and consumers in this approach.

In terms of government intervention to drive a move to renewable heat in rural dwellings the following is required:

  • A consistent long term policy for renewable heat in the home would provide the stability and certainty required to encourage investment.
  • A clear statement on the role of a different heat technologies for different dwelling types in Ireland in future.
  • Targets for deployment should be made in a number of different areas, for example at local and regional level, as well as national.
  • Targets should also be segmented by different housing types (age, build etc.) and location (rural, small town, urban) and current fuel use.
  • There should be consideration of the use of local or regional resources alongside improvement in supply chains and skills, and local knowledge and capacity to support uptake of low carbon heat.

 

While it is important to pick ‘low hanging fruit’, in terms of focusing on those dwellings which are easiest to change, it is also essential that the issues for ‘hard to treat’ homes are addressed early rather than being left till the 2030 deadline approaches. A planned programme will provide more certainty and allow for more effective responses.

 

Conclusions- Enabling Uptake

In its recent report for Ireland the International Energy Agency (IEA) recommended that Ireland should develop a time bound roadmap for decarbonising the heat sector through energy efficiency and fuel switching. The roadmap should establish clear scenarios and milestones for phasing out fossil fuels.

It is important that the focus from the start is not just on the easiest wins (though of course these are important) but it is also necessary, early in the process of moving to a low carbon system, to also tackle some of the more ‘hard to treat’ or difficult to incentivise places, or at least develop guidance and a plan for the best options. It would be useful to have a phased approach across housing types, and locations with interim targets alongside the longer term strategic aims

Such a phased approach[5] would provide clear strategic direction and confidence for industry and consumers allowing planned investment and avoiding a concentration of activity near the target date. It would also avoid a requirement for consumers to prematurely replace current heating systems.

 

Helen McHenry

[1] A very useful, more detailed discussion of heating off gas grid homes is available in this Scottish consultation document.

[2] While the term ‘oil boiler’ is commonly used, the fuel is usually kerosene.

[3] The Sustainable Energy Authority of Ireland (SEAI) work in this area shows various payback periods depending on house size and type for heat pumps over oil fired central heating. See more here: https://www.seai.ie/publications/Replacing-oil-boilers-with-heat-pump-household-economics-and-system-wide-impacts-Summary-document-.pdf

[4] https://www.gov.scot/publications/energy-efficient-scotland-future-low-carbon-heat-gas-buildings-call-evidence/pages/6/

[5] This was also advocated in the responses to the Scottish consultation on low carbon heat https://www.gov.scot/publications/future-low-carbon-heat-gas-buildings-analysis-responses-call-evidence/

 

 

Renewable heat in rural areas: what are the options?

How we heat our rural homes needs to change significantly as we move to a low carbon society.  There is an important focus on energy efficiency in our homes (read more here) and the government Climate Action Plan has set very ambitious targets for improving energy efficiency including retrofitting 500,000 buildings to a higher level of efficiency (BER B2 equivalent).  The other element necessary for reducing the carbon footprint of our homes is decarbonisation of the fuels used by switching to renewable energy which may be electrical (generated from wind, solar or in future ocean energy) or bioenergy (e.g. solid biomass, biogas or liquid biofuels).

 

Some of options for switching to renewable heating are discussed in this post. The focus is, as previously, on the existing housing stock, particularly ‘hard to treat’ homes in rural areas[1], which will be very expensive to make suitable for effective use of heat pump technologies.  There were 303,081 homes in the Western Region in 2016 and there is a significant amount of work ahead with 98% of homes likely to require energy efficiency upgrades and fuel switching to make the move to low carbon systems.

 

Options

Energy efficiency is a necessary condition for successful heat decarbonisation, but investment in a combination of energy efficiency and low-carbon heat will usually be the most cost-effective and practical solution.  As energy efficiency has been discussed in more detail here this section focuses on different heat options.

The Climate Action Plan places significant emphasis on heat pumps as replacements for high carbon heating systems (with a target of installation of 400,000 heat pumps in existing buildings by 2030).  As discussed previously 23% (65,187) of existing homes (built before 2010) in the Western Region may be suitable for heat pump installation (using the lower energy efficiency standard of HLI ≤2.3 (read more here)). This leaves 237,894 homes requiring very significant energy efficiency upgrades and major heating system change (switching from oil boilers or solid fuel) if heat pumps are to be installed.  Therefore while heat pumps will be a key technology in the decarbonisation of heat, particularly in new or more recently built homes or those which are already quite efficient, other options also need to be explored.

For the 78% of homes in the region which are not heat pump ready, switching from oil boilers and solid fuel will be both expensive and disruptive and there are particular categories of ‘hard to treat’ homes where achieving the high energy efficiency requirements needed for effective heat pump use will be difficult or prohibitively expensive.

There are a range of different heat technologies which could be deployed to move these to low carbon home heating systems. The technology used should depend on the home’s characteristics, its location, and the features of the available technologies alongside consideration of capital and lifetime costs in the specific situation.  Broadly, renewable heating technologies can be categorised as electrical or bioenergy.  In this post some of the technologies which may be suitable for rural homes in each of these categories are briefly outlined.  In considering these it not so much about what the exact technology mix should be, but how uptake can be achieved at scale and in a sensible way that makes full use of the economic potential of energy efficiency while promoting the lowest carbon heating options available.

 

Electrical Heating Systems

There are a number of electric heating solutions such as Electric Heat Pumps, Hybrid Heat Pumps and Storage Heaters as well as other electric heating sources and storage.  A brief overview of these options with a particular focus on their potential use in rural homes is given here.

Heat pumps

Heat pumps are the key technology for decarbonising rural heat.  The general term ‘Heat Pump’ includes Air Source Heat Pumps (ASHP), Ground Source Heat Pumps (GSHP) and Water Source Heat Pumps (which are unusual).  The SEAI has a useful guide for homeowners here.  In general for existing homes Air Source Heat Pumps are most likely to be installed.  While more efficient, the retrofitted installation of GSHP is more expensive and more disruptive than the ASHP option.

While very efficient because they operate at low temperatures, for heat pumps to work effectively and not be too expensive a high level of energy efficiency is required (see more discussion here).  They are usually used in conjunction with underfloor heating or may require larger radiators than in fossil fuel systems.  They are operated in a different way to conventional fossil fuel heating systems, needing to be on for longer periods.  An additional electric water heating source may be necessary.  Air Source Heat Pumps are however relatively small and are usually attached to an external wall.  Maintenance costs are likely to be lower than for oil central heating and they should be cheaper to operate when installed in suitable homes.

High temperature heat pumps are also being developed and they may be more suitable in less energy efficient homes but they are likely to be more expensive to operate than other heat pumps.

Hybrid heat pumps may also be a short term option.  These hybrid systems combine a heat pump with an existing fossil fuel boiler with the heat pump acting as the background heat source and the boiler used for peak demand.  While not a long term answer to decarbonisation they may have a role to play in less energy efficient homes.

Heat pump technology is well established and it is used widely in other countries so there is significant experience of their effective operation.  Nonetheless, in addition to stringent energy efficiency requirements, heat pumps are sensitive to quality of design and installation.  It is important that supply chains and skills in this technology are developed so that the experience of widespread transition to this technology is good.

 

Storage Heaters

Storage heating has long been an important electric heating technology, allowing users to make the most of cheaper ‘night rate’ electricity.  Electricity is used to heat ceramic bricks which store the heat (at night or when electricity is cheap) and release it during the day.  They can be effective but, with traditional storage heating once the stored heat was used there was no other heating option.  They could also be expensive to run.  More efficient and controllable storage heaters are becoming available; these have more options for ensuring the heat is released when required.  Some models use a fan to circulate heat better or can include an electric heater to provide additional heat when needed (though this may not be very efficient).

Storage heaters, using renewable electricity, will be an important low carbon heat option in ‘hard to treat’ homes unsuitable for heat pumps.  Although less efficient than heat pumps they are not as expensive to buy and install.  As with other renewable heating options, there are likely to be further technological developments in the next decade as global demand for low carbon heat increases.

Other electricity heating and storage

Heat can be stored in a variety of forms, most commonly as hot water, either in the traditional hot water tank, in the heat pump buffer tank or in solid heat batteries which are becoming more available (see here for an overview).   Where solar PV panels are installed, hot water, thermal or battery storage may be options for making the most of the household’s solar generation.  The electricity may also be used directly in electricity resistance heaters or in certain situations infrared heaters but unfortunately the electricity generation pattern of solar PV does not fit with heat demand (which will be higher after sunset and on days with less solar radiation) so storage will be important.

With the shift to low carbon heating options and more use of electricity for heat alongside smart opportunities to purchase electricity more cheaply at different times (such as when there is significant wind generation), there will be an increase in battery and thermal storage options (read a more detailed study of domestic heat storage and energy flexibility here).  These opportunities again highlight the importance of new developments in domestic heat and ensuring that any strategy for transitioning to low carbon heating systems is responsive to new, effective technological opportunities.

Bioenergy

Different forms of bioenergy (solid biomass, liquid biofuels and biogas) can provide renewable alternatives to electrification.  Each is likely to be suitable in different situations and over different time periods.

Solid Biomass

Biomass (usually wood) can be used as a direct replacement to existing systems, a new boiler is required but as these are high temperature heat systems (like oil and gas) there is less likely to be a requirement to change the internal pipe and radiator systems and so there is less disruption.  Biomass is available in the form of pellets, wood chip or logs.  Pellet systems can be more automated and so require less user involvement, while log boilers require filling and more frequent ash disposal but are cheaper to run.  For all biomass it is important that dry wood or pellets are used to allow the boiler to operate efficiently and to reduce particulate emissions.  Given that biomass can be a direct replacement for heating systems already in use in rural areas (biomass boilers for oil boilers and solid biomass for coal or peat), it is important that biomass options are explored as part of any domestic renewable heat strategy and supported in the transition to low carbon heat in rural homes.

None of the options for moving to renewable heat are easy, biomass boilers are more expensive to install than oil boilers, and they require more on-going maintenance by user (e.g. ash disposal) and servicer.  Concerns about the availability of consistent feedstock can affect consumer confidence and there may be worries about the potential for fluctuation in fuel costs.  As part of any strategy to decarbonise heat with biomass  the  issue of emissions and clean air must be considered, with enforcement of stove and boiler standards and quality standards (such as the Wood Fuel Quality Assurance (WFQA) scheme) to ensure the traceability and quality of the fuel used.

However, a clear strategy to develop local bioenergy supply chains in rural areas, education of those supplying fuel, installing and servicing boilers and using them should mean that biomass is an important option for renewable heat in rural areas and one which will bring significant employment while keeping the money households spend on heat in the local economy.

In addition to the replacement of oil central heating with biomass heating, biomass can substitute for solid fuel in systems already in use (18 % of heating in the Western Region is from peat and coal).  In general wood is the most likely replacement fuel in stoves and ranges but novel low carbon bioenergy solid fuel substitutes are being developed in Ireland.  Read more about the fuels and how they are produced here and here.

In the last decade there has been an increase in the use of wood burning stoves instead of open fires.  These are generally secondary heating sources but where wood or other solid biofuel is used instead of fossil fuel they lower the carbon intensity of heating.  This is particularly the case if they are used to heat a single room rather than putting on the central heating throughout the house.  This is a common practice in larger or less energy efficient homes where the cost of heating can be substantial.

Liquid Biofuels

There may be liquid biofuel options too.  There has been a reduction in carbon emissions from transport with the Biofuels Obligation Scheme, where a portion of the fossil fuel in petrol and diesel is replaced with a biofuels (read more here).  There may be an option to do similar in home heating oil (kerosene) as a short term measure to reduce the carbon intensity of home heating.  A recent government consultation on biofuels discussed this possibility and sought feedback on how it might work, based on the level of use and availability of suitable biofuels.  The consultation document and the responses are available here.

BioLPG is a potential option, providing an easy switch for those already using LPG as a home heating fuel (0.8%[2] of homes with central heating in the Western Region).  It has been developed substitute for fossil fuel LPG (read more here).  There is however, limited domestic production and there may be difficulties in sourcing materials to significantly expand production of BioLPG.  Additionally, there may be greater demand for use in transport where alternatives to liquid fossil fuels are more limited.

 

Biogas

As most of the rural Western Region is not on the natural gas network, there are probably fewer opportunities for using biogas as a direct home heating fuel substitute than in areas on the natural gas network (biogas can be mixed with natural gas and in the longer term could potentially replace fossil fuel natural gas).  Biogas is produced in a number of ways but Anaerobic Digestion (AD) of feedstocks such as food waste, slurry, sewage, or grass is the most important option.  The production of biogas will take place in rural areas, and depending on the site of the AD plants, there are possibilities for small scale heat networks to use it.  However, this is only likely to be possible in the longer term and will be dependent on a complex range of factors.

There are clearly bioenergy options which may form part of the transition to low carbon rural home heating alongside electrification.  All biofuels need a sustainable long-term, domestic supply, and well developed supply chains and to be compatible with air quality standards and be sourced sustainably.  Nonetheless bioenergy needs to form part of the suite of options for the low carbon transition and we need a clear policy statement on role of bioenergy in decarbonising domestic heat.

 

Conclusion

To drive a successful low carbon transition we need to be open to different heating options.  Solid biomass, liquid fuel and modern electricity storage heating are important options for decarbonising heat in rural buildings. In certain situations they may have lower installation costs or running costs than heat pumps.

We should measure their real world performance, collect information on the economics of different technologies and keep up to date with newer or developing options.  In addition to research about the best real life solutions for heating rural homes with renewable energy, we need good, robust data on actual installation and running costs, and then guidance on how best to move the ‘hard to treat’ rural home to low carbon heating so that people can make the choices most appropriate to them and to their home.

We must consider the full range of low carbon technologies, their associated performance, cost and environmental benefits.  To successfully transition to low carbon rural home heating we need to support a range of low carbon heating technologies beyond heat pumps.

 

 

Helen McHenry

[1] This term is used in the very useful Scottish consultation document on low carbon heat in homes off the natural gas grid https://www.gov.scot/publications/energy-efficient-scotland-future-low-carbon-heat-gas-buildings-call-evidence/pages/6/

[2] CSO Census of Population 2016, StatBank / Profile 1 – Housing in Ireland / E1053