Does a Rising tide lift all Boats? A look at the latest CSO data on Poverty and access to Services

The CSO released the latest data on Income and Living Conditions (Survey on Income and Living Conditions SILC) last week, see here. The headline figures indicate a continued rise in incomes between 2017 and 2018 which in turn was higher than the figures five years earlier, in 2012 (see earlier post on this here). This is in line with other national economic indicators such as continuing economic growth, employment growth and decreasing unemployment. To what extent is a rise in incomes reflected in a decline in poverty rates and how is this distributed at a spatial level within Ireland? This post highlights some recent data and asks does a rising tide lift all boats?

Poverty Rates

The CSO produce data on three different poverty measures and here we will examine the different rates as they apply to rural and urban areas.[1]

At Risk of Poverty rate[2]

The at risk of poverty rate nationally decreased from 15.7% in 2017 to 14.0% in 2018.The at risk of poverty rate in rural areas in 2018 is 14.7% compared to 13.6% in urban areas. In both rural and urban areas, the trend is downward – in rural areas (down from 17.2% in 2017), and in urban areas 13.6% (down from 15.1% in 2017). This is illustrated in Chart 1 below.

Deprivation Rate

The CSO also measure the deprivation rate, which is a broader measure than poverty and is defined as follows: Households that are excluded and marginalised from consuming goods and services which are considered the norm for other people in society, due to an inability to afford them, are considered to be deprived.  The set of eleven basic deprivation indicators are detailed below[3]. Individuals who experience two or more of the eleven listed items are considered to be experiencing enforced deprivation.

Nationally, the deprivation rate has decreased over the last few years. In 2016 it was 21% and it has since decreased from 18.8% in 2017 to 15.1% in 2018. At a spatial level it appears that there is a higher rate of deprivation in urban areas than in rural, in 2018 the urban deprivation rate was 16.0% while in rural areas it was 13.4%. Both of these rates have also shown a decrease from one year earlier, in 2017 the rates were 20.2% and 15.9%. This is also shown in Chart 1 below.

Consistent Poverty

Finally, the other commonly used measure of poverty, is the consistent poverty rate. An individual is defined as being in ‘consistent poverty’ if they are

  • Identified as being at risk of poverty and
  • Living in a household deprived of two or more of the eleven basic deprivation items discussed above

Nationally the rate went from 8.2% in 2016 to 6.7% in 2017 to 5.6% in 2018. In urban areas the consistent poverty rate declined from 7.4% in 2017 to 5.5% in 2018. In contrast the consistent poverty rate in rural areas increased slightly; from 5.3% in 2017 to 5.8% in 2018.

Regional Difference

The CSO also publish produce data at NUTS 2 regional level for the different poverty measures.

At Risk of Poverty rate

The regional data indicates that the at risk of poverty rate is higher in the more rural regions (Northern and Western) with 20.1% or a fifth of the population there at risk of poverty in 2018. There was a slight decline on a year earlier (21.8%). This consistent poverty rate in the Southern region is considerably lower 15%, down from 16.8% a year earlier. The Eastern and Midland region has the lowest rate 11.1%, down from 12.8% in 2017.

Deprivation Rate

The deprivation rates are more similar across regions (compared to the at risk of poverty rate), as chart 2 shows, though both the Southern and Eastern and Midland regions recorded more significant declines than that experienced by the Northern and Western Region, so in 2018 the Northern Region has the highest deprivation rate (17.2%), compared to the Southern region (15.2%) and the Eastern and Midland region (14.4%).

Consistent Poverty

A similar pattern is evident when examining the consistent poverty rates by region. In 2017 the Northern and Western Region had the lowest rate (6.4%) but a year later the region reported the highest rate – up to 7.8%. This contrasts with the performance and trends in the other regions both of which recorded declines in consistent poverty levels. The Southern region rate declined from 7.1% in 2017 to 6.5% in 2018. The Eastern and Midland region rate declined from 6.6% to 4.2% in 2018.

Overall the CSO recent data show that rural areas have a higher at risk of poverty rate, compared to their urban cousins, but have lower deprivation rates while the consistent poverty rate is most recently showing an upward trend in rural areas and the Northern and Western region and is higher than urban areas and the Eastern and Southern regions.

Measuring Deprivation: Access to Services?

In a previous blogpost in early 2019, see here, I argued that any measurement of deprivation and poverty is more complicated and other considerations such as access to services need to be taken into account.

Access to services

It is often said that rural poverty and deprivation is more hidden or less visible than that in urban areas and one aspect of this is access to services. The CSO SILC definition of deprivation is based on enforced deprivation where there is an inability to afford goods and services. But what of the inability to access goods and services because they are not available in the locality. The case of broadband is a good example. Most people who cannot access good quality broadband see it as a deprivation. It impacts on a person’s ability to access goods and services on-line and often impacts on their ability to generate their incomes, for small businesses and the self-employed.

What about access to other services? Can limited or no access be considered an indicator or measure of deprivation? The CSO have just published data which provides insights into access to a wide range of services, including transport, health and other services see here. There is extensive data and mapping resources which the WDC will revisit but a snapshot illustrates some interesting differences:

  • The average distance to most everyday services was at least three times longer for rural dwellings compared with urban dwellings. For a supermarket/convenience store, pharmacy and a GP, the average distance for rural residents was about seven times longer.
  • Examining differences by county, residents in Galway County, Donegal, Mayo, Leitrim and Roscommon had higher average distances to most everyday services when compared against other counties.
  • The average distance to 24-hour Garda stations ranged between 1.5km in Dublin City to 19.3km in Donegal, while the average distance to a GP was 3.1km, but was more than 5km in Roscommon, Galway County and Cork County.
  • Half of the people living in Roscommon had to travel 5km or more to visit a GP, followed by Monaghan (48%), Leitrim (43%) and Galway County (43%) as illustrated in the Map below. The darker the colour the higher the percentage of the population living 5km or more from a general practitioner.

Map 1  Percentage of Population 5km or more from a GP location by county

The CSO also provide a useful data dashboard to illustrate in a visual way access to services, see here.

Also this November Trinity published data on data on health and Health services, The Trinity National Deprivation Index 2016 see here . This research examines health and health services at a detailed spatial level (Electoral Division) and highlights regional inequalities.

Conclusions

These different data sources provide really useful insights into the geographic distribution of poverty, deprivation and access to services. Overall, the CSO SILC data indicate that along with rising incomes nationally there is evidence of a decline in poverty rates. However, the exception to this is evidence of rising consistent poverty rates in rural areas and in the Northern and Western region.

After a period of sustained economic growth and rising incomes, it is clear that not all boats are being raised in the rising tide. These data provide a wealth of information highlighting regional and spatial difference and an evidence base for effective policy change. This is a tool to inform Government policy to focus on eradicating poverty and in doing so being cognizant of the spatial patterns of poverty. Various policies ranging from consideration of a new Rural Strategy in the short term to Project Ireland 2040 over the medium to long term are some of the policy frameworks which need to respond to these findings.

 

Deirdre Frost

[1] Urban or Rural are defined as follows: Urban – population density greater than 1,000. Rural is Population density <199 – 999 and Rural areas in counties.

[2] This is the share of persons with an equivalised income below 60% of the national median income.

[3] Two pairs of strong shoes, A warm waterproof overcoat, Buy new (not second-hand) clothes.

Eat meal with meat, chicken, fish (or vegetarian equivalent) every second day, Have a roast joint or its equivalent once a week. Had to go without heating during the last year through lack of money, Keep the home adequately warm. Buy presents for family or friends at least once a year. Replace any worn out furniture. Have family or friends for a drink or meal once a month, Have a morning, afternoon or evening out in the last fortnight for entertainment.

How are we doing? Annual earning in Western Region and other counties

Data on earnings of employees in different counties has just been released by the CSO, providing another important contribution to our understanding of local and regional economic development.

Earnings Analysis Using Administrative Data Sources (EAADS) provides statistics on earnings for which the primary data source is the Revenue Commissioner’s P35L dataset of employee annual earnings which is linked to CSO and other data to provide economic and demographic characteristics.  This new data, along with the Geographical Profiles of Income (also released for the first time this year and discussed on the blog here) and the County Incomes data (discussed here) gives us an opportunity to triangulate different data 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 allows for a more nuanced understanding of the situation and trends in the Western Region.

In this post the EADDS annual earnings data is discussed for Western Region counties.  It should be remembered that this data is specifically employee earnings data which is just one element of individual or household incomes.  Other incomes sources (e.g. social welfare, earnings from wealth or profits from business) are not included in this data set.

Annual Earnings, 2018

Looking first at median[1] annual earnings[2] for 2018 (Figure 1), even though all Western Region counties (green) are below the national figure of €36,095 both Galway (€35,632) and Clare (€35,568) are only slightly below, in sixth and seventh place nationally.

Note Total includes Northern Ireland counties not listed above.

Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.15 Median1 annual earnings by county and sex 2018

Donegal had the lowest earnings (€29,298), almost a thousand euro less than Monaghan, the next highest, and more than €10,000 less than the earnings in Dublin (the highest county (€39,408).  Earnings in Roscommon are higher than might have been expected (€34,082, 13th place) from other data such as that for County Incomes, though  in line with Geographical Profiles of Income.

Annual Earnings in Western Region counties

Focussing more specifically on the range of earnings per employee in the Western Region (Figure 2), the gap between the lowest (Donegal) and the highest (Galway) is a €6,334 per year while annual earnings in Mayo and Leitrim are both around €2,500 less than in Galway.  There is only €64 difference in the annual median income per person in Clare and Galway.

Note Total includes Northern Ireland counties not listed above.

Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.15 Median1 annual earnings by county and sex 2018

Changes in Mean Earnings 2016-2018

This data is available for the years 2016, 2017 and 2018.  While this covers a relatively short period it is interesting to examine the change in mean[3] annual earnings over this period throughout Ireland (Figure 3).  Nationally earnings grew by 6.1% over the period with the highest growth rate in Dublin (7.6%) followed by Cork (6.6%) and Kilkenny (6.2%).  The lowest rates of growth were in Cavan (4.4% and Longford (4.4%).

Note: Total includes Northern Ireland counties not listed above.

Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.14 Mean annual earnings by county and sex

Looking more closely at the Western Region (Figure 4), the highest rate of earnings growth was in

Galway (5.8%), and the lowest in Roscommon (4.7%) and Sligo (4.7%).  No Western Region county had earnings growth higher than the national rate.

Note: Total includes Northern Ireland counties not listed above.

Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.14 Mean annual earnings by county and sex

Gender Differences in Earnings

County data is also available by sex, so it is possible to compare earnings in each county for males and females (Figure 5).  In all counties male earnings were higher than female earnings in 2018, with the largest difference in Cork, a very significant €10,205 per year (female earnings were only 76% of male).  Nationally the difference between male and female earnings was €7,394 and the smallest difference in both amount and proportion was in Donegal (€3,153, female earnings 90% of male).  In general, the largest differences between male and female earnings were in the highest earning counties, but Waterford (€8,511), Limerick (€8,318) and Kerry (€7,234), which has the third lowest medial annual earnings, were exceptions to this.

Source: Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.15 Median annual earnings by county and sex

Gender Differences in Earnings in the Western Region

The difference between male and female earnings was smallest in the Western Region.  Six of the nine counties where female earnings were 85% or more of male earnings were in our Region.  Sligo had the narrowest gap nationally (female earnings 91% of male), followed by Donegal (90%), Leitrim (89%), Galway and Mayo (86%) and Roscommon (85%)[4].  Clare was the exception in the region, with female earnings only 80% of male earnings.

The difference in the Western Region are shown more clearly in Figure 6 which highlights the earnings gap (percentage difference in what females earn compared to males).  Clearly Sligo (9%) and Donegal (11%) perform best.  Nationally the picture is bleaker with a 23% annual earnings gap, and in Clare males earn 25% more than females.

Source: Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.15 Median annual earnings by county and sex

Some of this earnings gap is likely to be accounted for by the higher instance of part time working among females. The differences may also relate to earning levels in the different sectors where men and women tend to work, as well as differences in employment types.  Nonetheless, the gap in earnings is very significant but, at least in relation to this statistic, the Western Region is a good performer.  The prevalence of public sector employment in the Western Region (discussed here), along with employment in Education (3 out of 4 people working in the Education sector in the Western Region are women) and Health (21.4% of all working women in the Western Region work in Health & Care, it is the largest employment sector for women in the region), probably influences this.

Changes in male and female earnings over time.

There is no clear pattern for the growth in mean earnings for males and females between 2016 and 2018 in the Western Region counties (Figure 7 below).  In four of the seven Western Region counties female earnings increased by more than male earnings between 2016 and 2018.  This was also the situation nationally (though the difference is small (0.1%)).   Female earnings in Sligo grew by 5.0% while male earnings in the same period grew by 4.0%.  In Clare the difference in earnings growth was more significant (5.7% for females and 4.3% for males).  Galway had the largest growth in female earnings over the period in the region at 6.1%, while male earnings grew by 5.3%.  If this pattern were to continue the gap in male and female earnings would narrow, or even disappear.

Source: Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.14 Mean annual earnings by county and sex

In contrast in three Western Region counties (and a total of nine counties nationally) male earnings grew by more than female earnings between 2016 and 2018.  Leitrim and Roscommon had the lowest female earning growth (4.4%) in the region and nationally.  The difference was most significant in Leitrim where male earnings grew by 5.3% over the same period.  In Donegal the difference was less marked (4.8% for males and 4.6% for females).  Unlike the other Western Region counties discussed above, if this pattern persists in these counties the gap in male and female earnings will widen.

Conclusion

This data set is focused on earning for those in employment rather than broader income data covering households or adults not in employment so it does not give a full picture of income levels.  It is, nonetheless, very useful to have this data at county level.  We can now make robust comparisons between counties and see some of the changes over time.  In future analysis it may be possible to consider in more depth how the different employment patterns and sectors in the counties in turn influence earnings.  Similarly correlations between education and training levels, and skill sets in the counties will help us better understand the needs and opportunities for counties and regions.

In the New Year I hope to have time to compare the data in this release with the other income data available at county level to get a better understanding of what each source is telling us about the trends and differences in the earnings and incomes in the Western Region.

 

Helen McHenry

 

[1] 1Median annual earnings: Half of the employees earn more than this amount and half earn less.  Median is used as it reduces the influence of outliers, in particular exceptionally high earners who could increase the mean significantly.

[2] Employees who worked for less than 50 weeks in the reference year are excluded from the calculations for annual earnings. This is done to improve comparability of the data over time.

[3] Mean is used here for comparison over time to maintain consistency with gender data discussed later.

[4] Monaghan (86%), Cavan (85%) and Kilkenny (85%) were the other counties.

e-Work, Remote work and Hubs, Some Recent Evidence

Introduction

The WDC produced the Policy Briefing e-Working in the Western Region in March 2017, see here. This briefing aimed to quantify the extent of e-working in the Western Region and nationally and set out policy recommendations. Since then e-working or remote working and co-working spaces such as hubs have received a lot of attention, but to what extent is the activity on the increase?

In the Policy briefing, the WDC noted that the extent of e-Working is hard to measure, in part because of the paucity of data, and in part because the practice is sometimes not very visible; it is often in the absence of company policy and at the discretion of local management. Some recent data in relation to official statistics and company practice is presented here.

CSO Pilot for Census 2021

There has been limited official statistics measuring the incidence of working from home. To date the Census has asked the question ‘how you usually travel to work’? with one of the answers being ‘work mainly at or from home’. This is very limited as 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, which some suggest is the most common pattern.

The CSO invited submissions to the consultation on questions for inclusion in Census 2021. In its submission, the WDC advocated for the inclusion of a question to more effectively capture the extent of Working from home/ e-working. Following the consultation exercise and a pilot exercise the CSO have now agreed to include a question measuring the number of days people work from home on a weekly basis in Census 2021. The results of the pilot survey were released earlier this year and they provide an insight into e-working. Some of the findings are highlighted below.

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 over a quarter 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 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. The proportion of home workers decreased among workers in older age groups. Among those in the 45-49 year age group, 32% worked one day from home.
  • Approximately 60% of people who work from home were male.
  • There were notable differences in the occupation of those who worked from home. e.g. 13.5% of those who worked from home worked in the ‘Science, research, engineering and technology professional’ occupation category.
  • In contrast only 0.6% of those who worked from home indicated they were in the ‘Process, plant and machine operatives’ occupation category
  • 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.
  • Of those who worked from home, 79% had fixed broadband internet, 18% had mobile broadband internet, and 3% indicated they had no internet connection. It is possible that that much of this 3% do not depend on internet access to conduct their work, for example those engaged in agriculture. See the CSO release here.

The WDC very much welcomes the inclusion by the CSO of the question on working from home in the next Census. This will allow a more thorough analysis of the practice based on comprehensive Census data.

Company Practice- Incidence of e-work in Ireland

Another part of the evidence base is data collected by companies on the extent to which they provide for flexible work practices such as e-working and the extent to which this is practiced by their employees.

IBEC have collected survey data on the extent of e-working for a few years now. Data has been recently published which shows an increasing prevalence of the practice based on a survey of IBEC members. 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.
  • In 2018, 7% had a practice of e-Working five days per week, up from 5% in 2016.
  • The IBEC survey shows that the likelihood of e-Working among companies increases with company size, so that 54% of companies with 500+ employees cite a practice of e-Working on a 1 or 2 days a week basis.
  • There is a slightly higher rate of e-Work among foreign owned compared to Irish owned companies, 40% and 33% respectively, and both these figures are up on two years previously – 34% and 27% respectively.
  • Sectorally the highest rates 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, with almost half (49%) report 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 congestion in larger urban centres.

Demand for e-working/co-working spaces/ Hubs

Another aspect of e-working or remote working is where the worker works from a hub rather than home. The success of initiatives variously called e-working spaces/ co-working spaces/ hubs also suggests e-working is on the increase. Some working spaces are funded by Department of Business, Enterprise and Innovation and some by the Department of Rural and Community Development. The hubs are variously classed as innovation, enterprise or community hubs, and many are focussed on start-ups and incubation spaces as well as providing e-working spaces for individual employees.

The Western Development Commission is coordinating an initiative with the Department of Community and Rural Development (DCRD) called the Atlantic Economic Corridor (AEC) Enterprise Hubs project. This three year project aims to create an interconnected community network from the 101 hubs identified in the AEC region (the region from Donegal to Kerry) along the Western Seaboard.

This week the WDC is convening two workshops, one in Limerick (19th November) and the second in Sligo (Thursday 21st November) aimed at bringing all key stakeholders together to work together to optimise the operation of the hubs and how they can support regional and rural development, e-workers and remote workers throughout the region. For further information see here for more information.

 

 

Deirdre Frost

Agency Workers – How Many Are There and Where do they Work?

Introduction

There is much discussion about the growth of ‘atypical’ forms of work – such as e-working, remote working, the gig, shared economy and temporary work etc.

The WDC has previously examined various aspects of atypical ways of working, identifying the extent to which it occurs in the Western Region, whether patterns differ to that elsewhere in the country, all aimed at informing labour market policy and identifying recommendations to support better employment opportunities in the Region.

The WDC Policy Briefing (No. 7) e-Working in the Western Region: A Review of the Evidence, examined the extent of e-work (also referred to as teleworking or remote working) in the Western Region, see here. Working at or from home can take different forms and this Policy Briefing examines e-working in traditional employer-employee relationships. The WDC also published case-studies of e-working in the Western Region which highlights a wide range of e-working experiences, see here.

A two page WDC Insights paper examined the gig or shared economy and how broadband and online platforms have enabled new forms of work and income generation to emerge. The paper examines the evidence on the extent to which Gig economy exists in the Western Region, download here.

In the third of the series, the WDC examined working from home. Based on Census of Population data which identifies whether people work ‘mainly at or from home’. The Census definition is self-assigned and can include those who work full-time from home or working from home on at least three days of a five day working week, see here. The WDC have suggested a change to Census 2021, to which the CSO has agreed, which will include a question asking people to list the number of days per week in which they work from home.

Agency Worker Employment

Another aspect of atypical working includes agency worker employment. Sometimes it is suggested that this type of employment is on the rise and is often less secure or more precarious than traditional employment forms.  Agency work, especially that which is temporary, is often considered insecure employment. Is it a phenomenon largely associated with periods of high unemployment and a fragile economy where employers are reluctant to recruit permanent employees or is it a feature of the business model of some companies?

Research conducted for the European Parliament found evidence of an increase in temporary employment as a consequence of the global economic crash a decade ago. The report noted, The financial crisis and its aftermath has been one driver affecting risk of precariousness in Europe. As employers and employees find themselves operating in a more competitive and uncertain context post-crisis, new hirings have increasingly taken place on the basis of temporary and marginal part-time contracts. This rise in atypical contracting has meant that job insecurity has increased significantly in some countries, such as Portugal, Spain, Ireland, Latvia and Greece, involuntary temporary work has increased significantly in Ireland, but also in Latvia and involuntary part-time working has increased significantly in Italy, Lithuania, Spain, Ireland, Latvia and Greece. The link to the full report (5.4MB) is here.

Examining more recent data at a regional level in Ireland, the CSO provide a broad regional breakdown at NUTS 3 level. In this blogpost we review the latest CSO data on agency worker employment examining trends and how the regions compare, see here for full release published in August 2019.

CSO definition

The CSO Labour Force Survey captures the levels of agency workers by asking the following question of all employees in the LFS: Do you have a contract with an employment agency that placed you in your current job and your salary? Yes or No. Responses are therefore based on self-reporting.

Nationally, in Q4 2017, there were 56,200 employees classified as agency workers, and in Q1 2019 the number had decreased to 50,400, a decrease of 5,800.

Examining trends by region, the trends are somewhat different as graph 1 below shows. Both the Northern and Western region and the Eastern and Midland region have a somewhat similar trend, albeit at different levels, unsurprising given the relative size of the numbers employed in each region.

In the Northern and Western Region, (depicted by the black line), the numbers of agency workers at the start of the period was 12,700, there was a decline to 4,300 in Q4 2018 and at the end of the period (Q1 2019) it was 7,500. It should be noted that the LFS is a survey and the results are weighted to conform to population estimates broken down by age, sex and region. Where there are smaller numbers, estimates are considered to have a wider margin of error and so should be treated with caution. In the data above, this wider margin of error has occurred where numbers fall below 7,500.

The Eastern and Midland Region (the orange line), starts with a level of agency workers of 27,000 at the end of 2017. At the end of the period the number of agency workers in the Eastern and Midland region was 22,200.

The Southern region (green line), displays a different trend, starting at 16,500, rising to 20,900 in Q2 2018, dipping at the end of Q4 2018 and then rising again in Q1 2019 to 20,700. It is not clear why the trend in the Southern region is somewhat different and this will be discussed further below.

Regional Share of Agency Workers

Examining agency workers as a share and proportion of all employees, Graph 2 below shows the regional share of employees who are agency workers over the period Q4 2017 to Q1 2019.

At the end of the period, in Q1 2019, the Northern & Western Region accounts for 14.9% of all agency workers in the country, the Southern Region accounts for 41.1% and the Eastern and Midland region accounts for 44%. The respective shares have changed over the last two years, with the Northern and Western Region accounting for a decreased share (22.6% in Q4 2017 to [14.9%] in Q1 2019. The Southern Region has increased its share (from 29.4% in 2017 to 41.1% in Q1 2019.

Proportion of employees who are agency workers

Given the different sizes of each regional labour market it is important to see the extent to which agency workers as a proportion of all employees, varies across time and region. This is illustrated in Graph 3 below.

Nationally (depicted by the blue line), in Q4 2017 agency workers comprised 3% of all employees. This proportion declined to 2.6% at the start of 2019. Both the Northern and Western and Eastern and Midland regions had proportions below the national average.

The Northern and Western region, depicted by the black line, started the period with the highest proportion of employees as agency workers (4.1%), but this has since declined to 1.4% and was recorded at 2.4% in Q1 2019. The Eastern and Midland region trend (depicted by the orange line) is very similar to the national trend albeit at a lower level.

For most of the period, the proportion of employees who are agency workers is the highest in the Southern region (depicted by the green line). At the start of the period under review, Q4 2017, the rate in the Southern region is lower than the national figure – 2.8% and 3.0% respectively. However, from Q1 2018 through to the end of 2019 the proportion of employees that are agency workers is consistently higher in the Southern Region than the national average.

Conclusions

The Southern region comprises the Mid-West (Clare, Limerick & North Tipperary), the South-East (Carlow, Kilkenny, Waterford and Wexford) and the South-West (Cork and Kerry). In the absence of NUTS 3 regional data it is difficult to know whether there may be specific concentrations associated with a concentration in industry sectors that may be more prevalent in the Southern region.

The CSO data does provide other information on the profile of agency worker employment. For example, nationally 52% of agency workers are female. There is a sectoral concentration within the Agriculture, Forestry, Fishing, Industry and Construction sectors where a quarter of all agency employees are employed. There is also a high concentration of agency workers in the Human health and social work activities sector, see here for full release.

Discussions with the CSO indicate it is difficult to ascertain why there is a relatively high share in the Southern region. The CSO point out that the LFS is a survey, the margin of error of the estimates can be greater with smaller cell sizes. More trend data will be needed to see if it is a more established trend and a particularly stronger feature of employment in the Southern Region or if it becomes a stronger feature of employment when economic growth is not as strong.

However, the availability of these data does allow us to monitor trends and helps us build a picture of the range and types of employment, all of which is critical to formulating and improving employment policy.

 

 

Deirdre Frost

Low carbon transition for Western Region homes- what’s the base line?

One of the most important elements of the transition to a low carbon rural region will be emissions reduction from homes in the Western Region by improving energy efficiency and switching to renewable energy sources for heating in particular (as discussed in the last blog post on this topic the focus of current WDC work on the transition is on rural dwellers).  The government, in the Climate Action Plan 2019, has set very ambitious targets for improving energy efficiency (retrofitting 500,000 buildings to a much higher level of efficiency (BER B2 or cost optimal or carbon equivalent) and moving to more renewable heat sources (with a target to install 600,000 heat pumps  (of which 400,000 will be in existing buildings).  In order to understand how what needs to be done to meet these targets we need to know where we are starting from.  This post sets out, in detail, some of the baseline information on homes in the Western Region.  Knowing the current situation means that we can better understand what we need to do to make the transition possible and ways to make it happen.

Homes in the Western Region

To understand the challenge it is first useful to look at the number and types of homes in the seven county Western Region.  According to Census 2016 there were 303,081 ‘permanent housing units’, that is all permanent residents excluding caravans, mobile homes and other temporary structures, (these accounted for 987 residences in 2016).  While newer homes have been built since the Census in 2016, the numbers are relatively small and those homes are not the focus of the efficiency and energy upgrades envisaged in the Climate Action Plan, so the Census remains the key data source.  The Western Region, in 2016, accounted for 17.98% of the permanent homes in Ireland which is in line with the share of the population living in the region (17.4%).

Galway county had the largest number of homes (62,729) and when combined with Galway city (as it is in some data discussed below) it has significantly more homes (91,556) than other Western Region counties.  Leitrim, the smallest Western Region county, had 12,404 homes (see Figure 1 below).

 

Figure 1: Permanent homes by county in the Western Region, 2016

Source: CSO Census of Population, Profile 1: Housing in Ireland Table E1002

 

The types of homes in the Region are also important, given that different types have different levels of energy efficiency and can have different options for switching to more renewable energy sources. For example, terraced houses will have lower heat loss than detached houses while flats and apartments are more suited to a central or district heating systems than more dispersed housing.  Figure 2 shows the significance of different housing types in the region and state.

 

Figure 2: Type of permanent housing units in the Western Region, 2016

Source: CSO Census of Population, Profile 1: Housing in Ireland Table E1002

Clearly, with the exception of Galway city, detached houses are the most common housing type in the region (64% of all homes in the region compared to 37% of homes in the rest of the state).  As would be expected the more rural counties have an even higher proportion of detached homes (Leitrim 73%, Roscommon 74%).  Counties with a higher urban population (Clare 59%, Sligo 57%) have a smaller proportion of detached homes but all are still above the state average (42%.  As noted above this has implications for the types of changes we need to make in relation to efficiency and heat sources.

The age of homes in the region is also important to planning the transition.  Figure 3 shows when homes in the different counties were built.  Significant house building in all counties between 2001 and 2010 is very apparent, with more than 30% of homes in Galway County (32%), Leitrim (35%), Roscommon (31%) and Donegal (31%) built in that period, while all other Western Region counties also have a higher proportion of homes built in that period than the rest of the state (25%).  Homes built in the different periods have different requirements for energy efficiency upgrades, and will face different costs and challenges.  The oldest homes will often face the most significant challenges, though it should also be recognised that they are not necessarily the least efficient.  More than a quarter of homes in Leitrim (26%) were built before 1960 while only 17% of those in Donegal were. In Galway City only 10% of homes were built before 1960.

 

Figure 3: Age of homes in the Western Region, 2016

Source: CSO Census of Population, Profile 1: Housing in Ireland Table E1005

 

While there will be different requirements for transforming homes from different eras, given the more recent improvement in building standards it is generally assumed that homes built  after 2010 will require least upgrading and therefore the focus of the SEAI grants, for example for heat pump  installation, is on homes built before 2011.  Figure 4 shows the proportions of homes in the Western Region built before and after 2011 (excluding those not stated).  In most counties, and in the State, only 2% of homes were built from 2011 onward (the exceptions are Galway City (1%) and Galway County (3%).

Figure 4: Number of Homes built pre and post 2011 in the Western Region, 2016

Source: CSO Census of Population, Profile 1: Housing in Ireland Table E1005

 

Evidently there is a very significant amount of work ahead with almost 98% of homes likely to require energy efficiency upgrades and fuel switching to complete a move to a low carbon economy. There are of course some pre 2011 exceptions such as the small number of homes which were built to higher efficiency standards than required or which have completed the process already).

 

Efficiency of Homes: Building Energy ratings (BER)

A Building Energy Rating (BER) certificate indicates a building’s energy performance rates on a scale of A-G. A-rated homes are the most energy efficient and G-rated are the least energy efficient.  It is calculated through energy use for space and hot water heating, ventilation, and lighting.  Figure 5 shows the different energy ratings given to buildings covered in each county up to 2018.  In all counties more than 90% of homes achieve a B3 rating or less.  While this data is very useful, in most areas fewer than a third of homes (often considerably fewer) have had a BER assessment[1] and so it is not clear if the homes which have been assessed accurately reflect the housing stock.

Figure 5: Percentage of rated buildings in each BER class for Western Region counties, 2019

Source: CSO, 2019, Domestic Building Energy Rating Table EBA02

 

The Climate Action Plan focus is on improving homes to a BER rating of at least B2 (or cost optimal or carbon equivalent.  Currently in the Western Region Galway and Mayo perform best with 5% of homes with a BER rating achieving B2 while only 2% in Leitrim and Roscommon do so.

The SEAI has recently produced an interactive map of BER ratings and with detailed BER data mapped at small area level.  Figure 6 below is a snapshot the national map where green DEDs have a median rating of B and above (there are not many on the map), while yellow shows DEDs with A median C rating, orange  is D, Red is E, Dark red, F and purple G.  The map should be viewed with caution as many DEDs have fewer than 20% of their homes with a BER rating and so the data may be skewed.  It is, however, really useful for planning and can be viewed in full here.

 

Figure 6: Map of median BER ratings by ED

 

Source: SEAI https://www.seai.ie/technologies/seai-maps/ber-map/

 

Fuels used in home heating.

While much of the discussion above has related to improving energy efficiency in homes, the other element necessary for reducing the carbon foot print of our homes is the fuel used for heating.  We will need to decarbonise 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. wood energy, biogas from anaerobic digestion or a liquid biofuel).

The highest priorities for change are buildings heated using the most carbon intensive fuels (oil, coal and peat) and homes in the Western Region are particularly reliant on these, being rural, with little access to the natural gas grid and often using very traditional forms of central heating.  Figure 7 below shows the percentage use of oil and solid fuels (excluding wood energy) used in homes in the Western Region (from Census 2016).  In the Western Region as a whole more than four fifths of homes use oil, coal or peat for central heating, compared with 44% of homes in the rest of the state.  In Donegal 9 out of 10 homes use these fuels, with Mayo and Roscommon almost as high (each 87%).  Galway city has the lowest use of these fuels in the region (57%) and even that is higher than in the rest of the state.  Clearly homes in Western Region counties need to be prioritised in the switch to low carbon heating.

Figure 7: Oil and solid fuel as a percentage of central heating fuels in Western Region counties

Source: CSO Census of Population, Profile 1: Housing in Ireland Table E1053

 

While much of the discussion on home heat (e.g. in the Climate Action Plan) has focussed on heat pump installation, it may be that homes heated using coal and peat might find a switch to other renewable solid biomass such as wood energy to be more appropriate, especially in older homes which will need very significant retrofitting and may have particular ventilation requirements.  The focus of heat pump installation may therefore be on homes heated using oil.  Figure 8 below shows the percentage of homes in Region which use oil for central heating.

 

Figure 8: Oil as a percentage of central heating fuels in Western Region counties

Source: CSO Census of Population, Profile 1: Housing in Ireland Table E1053

Almost 60% of homes in the Western Region use oil for central heating compared to 36% in the rest of the state.  Again Galway city is lowest (at 50%) with the highest oil use in Leitrim (65%) and Donegal (64%).  A fifth of homes in Galway city (21%) are using electricity for heating which reflects the higher number of flats and apartments there (21%).  Roscommon has relatively low oil use (55%) because of the very significant use of peat (27%) to fuel central heating.  Homes in Galway county also commonly use peat (23%).

 

Heat Pump ready?

While it is important to change the type of energy used to heat homes in the Region, as discussed above  energy efficiency and good insulation are the first steps which need to be taken with a ‘fabric first’ approach advocated by SEAI for home energy improvement.  This is particularly important when heat pumps are to be installed as the home must be well insulated in order for heat pumps to work properly.

SEAI have used Heat Loss Indicator (HLI) data from BER certifications (see more here) to assess how many homes built prior to 2010 are ready to have heat pumps installed.  A prerequisite for heat pump installation is a HLI of ≤ 2 W/K/m2 and the percentage of homes ready for heat pump installation in the Western Region is shown in Figure 9 below.  Interestingly, this is a similar percentage of homes[2] in the Western Region (11.7%) as in the Rest of the State (12.8%).  Sligo is the Western Region county with the highest proportion of heat pump ready homes (15.6%) followed by Galway (14.0%) and Leitrim (12.6%).  Roscommon (8.6%) and Mayo (9.3%) have the lowest number of homes ready for heat pumps.

Figure 9: Heat Pump ready homes (HLI ≤2) by Western Region county

Source: https://www.slideshare.net/SustainableEnergyAut/key-learnings-from-the-seai-heat-pump-programme and CSO Census of Population, Profile 1: Housing in Ireland Table E1002. Own calculations.

 

The HLI of ≤ 2 is the most stringent measure of heat pump readiness, but given the very significant target for heat pump installation in the Climate Action Plan (400,000 in existing homes by 2030) if it also useful to look at other homes which are close to this level of readiness.  SEAI have, therefore, also estimated the number of homes which are heat pump ready using a HLI of ≤2.3 with certain caveats (see this for the detail of these).

 

Using this measure there are a considerably higher proportion of heat pump ready homes (see Figure 10) in the Western Region (23.2%)[3] which is higher than the rest of the State (22.5%).  Again Sligo has the most heat pump ready homes (27.8%) with Galway (23.9%), Leitrim (24.1%) and Clare 23.9% all higher than the Region average.  The lowest proportion of homes ready for a heat pump is in Roscommon (18%) and Mayo (19.4%).

 

Figure 10: Heat Pump ready homes (HLI ≤2.3) by Western Region county

Source: https://www.slideshare.net/SustainableEnergyAut/key-learnings-from-the-seai-heat-pump-programme and CSO Census of Population, Profile 1: Housing in Ireland Table E1002. Own calculations.

 

Although only 23% of homes are currently heat pump ready in the Western Region this still amounts to 65,187 homes in total in the region (and 351,295 in total for the state).  Prioritising these homes would make a very significant start on meeting the target in the Climate Action Plan.

Conclusion

In this post I have given some of the baseline information necessary for planning the transformation of our Western Region homes to more energy efficient, low carbon dwellings.  Clearly the scale of the transformation required is enormous and some of the issues which need to be addressed and actions which might be put in place will be discussed in my next post.

 

Helen McHenry

 

[1] BERs are usually done because a home is to be sold and a BER cert is required for this.

[2] Heat pump ready homes by county is shown as a percentage of permanent homes built before 2011 from CSO Census of Population 2016.

[3] This figure includes all those homes with a HLI of ≤2.0

Carbon Tax: Use of revenue to address climate action issues in rural areas

The WDC made a submission to the Department of Finance Consultation on the options for the use of revenues raised from increases in carbon tax.

A detailed consultation paper was prepared by the Tax Division of the Department of Finance which provided background information on carbon tax revenues, proposed changes in the rate of the tax and possible implication of these increases for users.  They also outlined a number of options for the use of revenues from the tax.

The ESRI has also done a number of studies on distributional effects of carbon tax and revenue recycling options and noted that the carbon tax disproportionately affects lower income households and rural households.  I hope to look at these studies in more detail in a future post.

As regular readers of the blog know, the Western Region (the area under the WDC remit) is a largely rural region which takes in some of the most remote parts of the state. 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. Thus WDC work has a particular focus on the needs of, and opportunities for, more rural and peripheral areas.  The five most rural counties in Ireland are in the Western Region (Leitrim, Galway county, Roscommon, Donegal and Mayo, and the Western Region also has a higher share of the population living in smaller towns.

In this submission we therefore concentrated on issues for rural areas and our region.  Climate action for rural dwellers is not often discussed in policy and there is no significant body of work (internationally or nationally) on climate change and emission issues for rural areas in developed countries and yet there are important differences in energy use patterns and emissions in rural areas.  Hence, the main focus of the submission was on key climate matters for rural dwellers including energy efficiency; home heating; transport; and stimulating rural enterprise.

The WDC emphasised that a portion of the revenues from increases in carbon tax focus should focus on addressing issues for rural areas, and on actions to ensure that rural areas are in a position to benefit from a move to a low carbon economy.  There are many opportunities to do so and targeted programmes would enable rural dwellers to make a fair contribution to national goals for renewable energy and to actions to mitigate climate change.

 

You can view the submission here.

 

Helen McHenry

The Benefits as well as the Costs of the National Broadband Plan

There are significant benefits associated with the planned rollout of the National Broadband Plan (NBP), though the recent media coverage seemed to focus largely on the costs.

A review of newspaper headlines over the period following the announcement of the preferred bidder and the likely cost of the National Broadband Plan (NBP), suggests that the overall benefit is significantly lower than the cost. For example some of the headlines included;

  • Its wrong to endorse broadband plan and ignore officials’ warning on costs, Independent, 12 May 2019
  • National Broadband Plan, labelled ‘the worst deal ever seen’ Irish Examiner, 13 May 2019
  • Government to press ahead with €3bn broadband plan despite cost warnings, 26 April, 2019

But in reality, the cost benefit analysis (CBA) conducted by consultants on behalf of the Department of Communications, Climate Action and Environment, found that under all three different scenarios considered, the benefits outweigh the costs. The CBA also made clear that many benefits were not included in the computations and some of the benefits were estimated on a very conservative basis.

The Costs and Benefits of the National Broadband Plan

The table below shows the costs and benefits anticipated under three different scenarios; pessimistic, central and optimistic. There is a detailed analysis showing how each of the costs and benefits are computed, all of which is published and available for download on the Department of Communications website, see here  (825KB)

Costs: The total project costs include both costs to the State and costs to the operator.

Benefits include benefits to residents and enterprises. The residential benefits refer to the residents who will benefit from the NBP through various savings which will be made in communications services, time savings through online access of services as well as time and cost savings from remote working.

The enterprise benefits refer both to benefits to all firms, those within the NBP area and those outside it.

For firms outside the NBP area one of the largest benefits to be realised is that many of their staff (who live in the NBP area) will now have better broadband access enabling productivity gains from remote/tele-working.

For firms within the NBP area, all SMEs will benefit. Farm enterprises will be able to engage in smart farming, while all SMEs will benefit from higher upload and download speeds to serve their clients and suppliers more efficiently.

Scope of Costs and Benefits

Table 1 shows that under all three scenarios the benefits of the NBP exceed the costs. In the analysis, the entire range of costs have been considered and furthermore they are capped and there are various clawback mechanisms to ensure limited and capped costs to the State.

The benefits that have been measured are just some of the range and a whole range of benefits have not been included. As the CBA report notes, in including and profiling benefits, the consultants adopted a deliberately conservative approach to ensure benefits were not overstated. As a result, there are important categories of benefits which are not quantified and therefore not included in the CBA analysis. Table 2 below provides an overview of these benefits and examples of how households and enterprises in the NBP area may benefit.

Measuring benefits – Other international examples

In making the case for various state supports and state aid for broadband investment, other countries have also grappled with how to measure and capture benefits. While investment in fibre networks can be evaluated in a similar fashion to investment in other infrastructure, technological innovation and new product and service developments are continually extending the range of benefits from investment in broadband infrastructure generally and fibre deployment in particular. Consideration of these other benefits is not new and other countries have valued the benefits of fibre rollout across various sectors.

For example, research undertaken in Sweden provides some economic calculations on additional returns to fibre which need to be captured in evaluation. In Sweden, higher rents are charged for homes with fibre connectivity. Tenants pay an extra €5.50 per month for a home with a fibre connection and this is valued at €267 million per year for all fibre connected homes, which yields €185.6 million per annum return on investment.

Investment in fibre networks can also reduce telecommunications costs to the user, for example the Stockholm Regional Council (regional government) reduced its telecommunications costs by 50% following deployment of the fibre network. This is attributed to increased efficiency and greater competition with more telecommunication operators providing services on the high capacity fibre network.

The development of eHealth technologies including remote monitoring and diagnosis will provide opportunities to deliver some healthcare direct to the community rather than through hospitals. Community care is generally significantly less expensive than hospital care. The greater bandwidth and symmetrical (upload and download) speeds with fibre networks can support those applications requiring very good upload and download speeds. As many of these applications such as eHealth are still being developed, it is difficult to estimate their full value and benefit.

At a wider economy level, the OECD has examined the benefits arising to other economic sectors (transport, health, education and electricity) of a national ‘fibre to the home’ network. The analysis examines the cost of deploying ‘fibre to the home’ across different OECD countries, including Ireland, and has estimated that the combined savings in each of the four sectors over a 10 year period could justify the cost of building a national ‘fibre to the home’ network. These examples are outlined in the WDC report, Connecting the West, Next Generation Broadband in the Western Region, see here (1.5MB).

Measuring the benefits of State investment should also take account of the impact on other Government policy objectives. More balanced regional and rural development and greater regional economic growth are important Government policy objectives.

State Aid

The Telecoms sector just like most other economic sectors are subject to strict EU State Aid Rules. State aid is subject to very strict criteria, one of which is that there is market failure. In the NBP areas, defined according to a detailed mapping process which was undertaken as part of the requirements for State aid, it is clear that no commercial deployment of high speed broadband has been or is likely to occur. This is then a case of market failure. Just as with other utility provision (transport, water, energy) the State intervenes where commercial provision does not occur.

One of the other criteria for State aid is that the aid serves an Objective of Common Interest. The European Commission’s Digital Agenda for Europe (DAE) is an objective of common interest to which Ireland has committed and this sets out a minimum of 30Mbps download for all homes and businesses by 2020. Given the increasing demand for higher speeds the EU Commission has revised upwards the target for member states which is now to achieve a basic service of 100 Mbps for all households by 2025. This objective and need to reduce the current digital divide complies with State aid requirements.

Conclusions

The NBP has been subject to probably the most extensive, thorough and comprehensive evaluation both within various Government Departments as well as across the wider public domain.

When the benefits exceed the costs, and the costs are capped while the benefits that are measured are only partial and conservatively estimated then the results of the CBA are positive and clearly make the case to proceed with the investment.

The full report on the benefits from the NBP (February 2019), is available for download on the Department of Communications website, available here (2.5MB).

The NBP Cost Benefit Analysis report (April 2019), is available for download for the Department of Communications, see here  (825KB).

 

 

Deirdre Frost

Recent Trends in Regional GDP

With the Irish economy again experiencing a period of significant expansion (it is estimated to have grown by 6.7% in 2018) it is important to consider how different Irish are regions doing in this time of growth.  While this was examined for the three Assembly regions (Eastern and Midland, Southern and Northern and Western) in a previous post using Eurostat data, we now have the opportunity to consider economic growth and prosperity, as measured by GDP, for the smaller regions.

Regional GDP data (NUTS3 regions) for 2016, with preliminary figures for 2017 was published in April, so in this post we consider the most recent information, as well as looking back to 2008, and observing the regional patterns of recession and growth in the last decade.  While income data is available at county level (discussed for the Western Region in a previous post) the GDP and GVA data[i] is only available at regional level.  The Western Region, under the WDC’s remit includes the entire West region and three of the five counties in the newly delineated Border region (Louth is now included with the Mid East as discussed here).  Clare is part of the Mid West and unfortunately data for the Mid West has been suppressed in the CSO publication for reasons of confidentiality.  In charts for this post the Mid West and South West (also suppressed) have been combined for the years 2015-2017.

When comparing regions of very different sizes GDP per person is the most useful measure (total GDP and regions share of the national economy will be discussed in the next post on this topic). Figure 1 illustrates the very significant differences in GDP among regions.  In both 2016 and 2017 the lowest per capita GDP was in the Border region (€21,446 in 2016) followed by the Midland[ii] (€23,417 in 2016) and the West (€29,798 in 2016).

 

Figure 1: Regional GDP per person 2016 and 2017 (estimated)

a Data for 2015, 2016 and 2017 suppressed in MW and SW for reasons of confidentiality, b Preliminary

Source: CSO, 2019, County Incomes and Regional GDP, Table 9a, Mid West and South West own calculations based on Table 9 and Table 13, 13a

 

In contrast, the Mid West & South West  had the highest per capita GDP (this is a combined region as data for the two regions was suppressed) at €80,758 in 2016 which is almost four times greater than that in the Border region.  There are some unusual factors underlying this growth which are discussed in detail here.  Dublin, when considered alone had the highest GDP per person at (€81,184) in 2016 (though not in 2017) but it is shown here with the Mid East as much of the Dublin GDP is produced by workers living the Mid East (discussed here) and so considering the two region’s GDP together, when examining the per capita data gives a more realistic picture.  The very high levels of GDP per person in these regions (with large populations and significant economic output) bring GDP person in the State was €57,650 in 2016.

While 2017 figures are preliminary it is nonetheless interesting to look more closely at the growth rates most recent two years for which data is available.  According to this measure (GDP at current market prices) the economy of the state grew by 4.1% between 2015 and 2016, and 7.6% between 2016 and 2017.  Interestingly, the South East showed the highest annual growth (17.7%) between 2015 and 2016 with the Mid East next highest (12.8%) followed by Dublin at 9.7%.  The economy of the Border region grew by 6% but regional GDP decreased in the West by 6.1% between 2015 and 2016 and by 3.7% in the Midland region.  Surprisingly, as the South West was one of the regions with the most significant growth in 2015 the Mid West & South West economy contracted in that year by 3.6%.  The economy in all regions  grew in 2017 (except the Midland which contracted by 0.7% in the year and by 4.3% in total since 2015) with the biggest growth in Dublin (12.6%).  The West also showed a year on year recovery (5.3%) but still is estimated to have a smaller economy in 2017 than 2015 (by 1.1%).

 

Figure 2: Percentage change in Regional GDP between 2015 and 2017

b preliminary figure; MW & SW, own calculations

Source: CSO, 2019, Table 9   GVA per Region at Current Market Prices (GDP), 2008 to 2017

 

Looking back over a longer period, the very significant differences in patterns of growth are evident (Figure 3).  Dublin, which was always the largest economy, has grown more rapidly than other regions since 2012, while the Mid West & South West combined show the impact of the very significant level shift in GDP which occurred in 2015 (and is discussed in more detail in this post Leprechauns in Invisible Regions: Regional GVA (GDP) in 2015)

Figure 3: GDP per person in NUTS 3 regions 2008-2017

a Data for 2015, 2016 and 2017 suppressed for reasons of confidentiality, b Preliminary

Source: CSO, 2019, County Incomes and Regional GDP, Table 9a, Mid West and South West own calculations based on Table 9 and Tables 12,13, 13a

 

Other Regions had more modest growth, but both the South East and the Mid East have recovered well since the recession.  This is shown more clearly in Figure 4.  The economy of the Border region is estimated to be 0.8% smaller in 2017 than 2018 and the Midland region is 0.4% smaller. The economy of the West region grew modestly (10.6%) during the ten year period.  These regions clearly have not benefited from the recovery and growth in economic activity experienced in other regions.  The economies of the Mid West and South West combined have more than doubled in size (118% growth) between 2008 and 2017, while the Dublin economy grew by more than 50%.

Figure 4: Growth and decline in regional economies GDP since 2008.

Source: CSO, 2019, CSO, 2019, County Incomes and Regional GDP, Table 9 GVA per region at current market prices (GDP) 2008-2017, own calculations

 

Given the very different growth rates in the regional economies, there has been significant divergence among regions since 2008 and in particular since 2012.  The divergence is shown clearly over time when looking at how each of the region compares to the State average.  This is done using an Index with the State in each year equal to 100 (Figure 5).  In 2008 only two regions (Dublin and the South West) were above the state average, and the difference between the highest (Dublin) and the lowest (Border) was 85 points.  By 2017 Dublin and the combined region (Mid West and South West) were above the state average, and the other regions remained below, with the difference between the highest (again Dublin) and the lowest, (the Border) now 111 points.  By 2017 the Border, (36.1%) and the Midland region (37.5%), were significantly lower than the state average, while GDP per person in the Dublin region is 47% more than the state average.  The West, which has the strong economic driver of Galway, had a GDP per person of 72.5% of the state average in 2008 and 50.6% by 2017.

Figure 5: Index of GVA per person (Basic Prices) for each region 2008-2017, State=100

Source: CSO, 2019, County Incomes and Regional GDP, Table 10, MW & SW own calculations.

 

Along with this divergence in economic activity among regions within the State, it is interesting to look at the pattern in relation to the EU28.  Figure 6 shows GVA in the State relative to the EU28 increased from 129% of the EU28 average in 2008 to 178% in 2017.  The Dublin region grew even more strongly (from 188.7 in 2008 to 262.3 in 2017).  The West, which was 95.7% of the EU28 average in 2008, peaked in 2012 at 107% of the EU28 average, but has since fallen back to 90%.

Figure 6: Index of GVA per person (Basic Prices) for each region and state 2008-2017, EU28=100

Source: CSO, 2019, County Incomes and Regional GDP, Table 11, MW & SW own calculations.

 

Similarly the Border region which was 79% of the EU average in 2008 had decreased to 64.3% in 2017.  Clearly these regions are not just falling behind in relation to the state average, they are also diverging from the EU average, which is a cause for concern.  As discussed in this post A Tale of Three Regions: GDP in the new NUTS2 Regions it also has implications for the status of the regions in relation to cohesion funding and the Border Midland and West NUTS2 region will revert to Transition Region status from 2021.

Conclusion

GDP is the key measure of a how region’s economy is doing and is one of the important indicators of regional wellbeing[iii].  But the data shows that divergence in regional GDP is increasing, with some regions are experiencing very rapid economic growth while others, especially those in the Western Region (the Border region and the West) along with the Midland region are experiencing more modest growth and even contraction.

Given the significant growth of the national economy this is an important time to address issues in lagging regions such as the infrastructure deficits and other structural economic issues and to incentivise regional employment growth and make it easier for new businesses to establish and existing enterprise to survive.

Regions are the drivers of modern economic systems and all regions have the potential to thrive and to contribute to the national economy. However, because success breeds success some regions do this more effectively than others. Less advantaged regions will benefit if policy is focused on ensuring that they too can reach their potential. With the economic upturn, regional policy must be prioritised, it is a waste of talent and opportunity not to realise all regions’ potential.  It is to be hoped that the Ireland 2040 project can achieve this.

 

Helen McHenry

 

[i] GDP is Gross Domestic Product, GDP and GVA are the same concept i.e. they measure the value of the goods and services (or part thereof) which are produced within a region or country. GDP is valued at market prices and hence includes taxes charged and excludes the value of subsidies provided. GVA at basic prices on the other hand excludes product taxes and includes product subsidies. See background notes 

[ii] Although the Midland Region has consistently one of the lowest GVA per person, and Dublin and the Mid East the highest, the fact that GVA is measured where it is produced and the population is counted where people reside, means that those commuting from the Midland region of Dublin and the Mid East are contributing to the GVA of that region (which is why for GDP per person Dublin and the Mid East are often shown as combined for per capita data), while they form part of the denominator in the Midland region, so increasing the GVA of one and reducing that in the other.

[iii] Discussions of GDP inevitably must also consider on the limitations of the statistic as a measure of economic development (see here ) but it is the key statistic used, despite shortcomings.  As Eurostat notes here GDP per capita does not provide an indication as to the distribution of wealth between different population groups in the same region, nor does it measure the income ultimately available to private households in a region

Administrative, Entertainment & Other Services rely on local demand from businesses & consumers, but potential to expand international activity

The Western Development Commission (WDC) has just published the latest in its series of Regional Sectoral Profiles which analyse employment and enterprise data for economic sectors in the Western Region.  This report examines the Administrative, Entertainment & Other Services sector, and two publications are available:

This sector includes three sub-sectors which provide services to both businesses and individuals:

  • ‘Administrative & Support Services’ primarily provide ‘outsourced’ type business services (property management and landscaping, contract cleaning, ‘back office’ business processing/call centres, recruitment, leasing and security) but it also includes travel agents and tour operators;
  • ‘Arts, Entertainment & Recreation’ (creative arts, cinemas, gyms, sports activities, amusements, museums and gambling); and
  • ‘Other Services’ (hairdressing and beauty, laundry, repair services, funeral services, unions and business groups and domestic staff) mainly provide services to individuals and households.

Given the wide scope of this sector, it is particularly important to consider differences across the sub-sectors. Some of the key findings from the analysis are:

Sector plays a smaller role in Western Region’s labour market

Administrative, Entertainment & Other Services account for a smaller share of total jobs in the region than nationally (Fig. 1); 6.5% of total employment compared with 7.5%.  Large urban centres and global business services activity around Shannon influence its relative importance across western counties.

The region experienced lower jobs growth in this sector than elsewhere between 2011 and 2016 (8.9% compared with 13.6%).  As this sector relies heavily on local demand, slower economic recovery in the region was a factor in this.  Nevertheless as this sector grew more than total jobs in the region (7.5%), it contributed to the region’s jobs recovery.

Fig. 1: Percentage of total employment in Administrative, Entertainment & Other Services in Western Region and state 2016. Source: CSO, Census 2016: Summary Results Part 2, Table EZ011

High and growing self-employment

This sector in the region is characterised by a high rate of self-employment, both compared with elsewhere (27.6% in region v 21.5% in state) and with other sectors. This is particularly the case in more rural counties and for locally provided services (38.1% of all employment in ‘Other Services’ is self-employment).

The number of self-employed in this sector in the region increased by 19.4% (2011-2016), the highest growth across all sectors, as many individuals responded to growing demand by setting up small-scale service businesses (e.g. gyms, barbers, HR services, phone repair).  Continuation of existing, and the development of new initiatives and soft supports, to support self-employment, including addressing issues of the quality and viability of some self-employment, is important particularly in smaller urban centres and rural areas where self-employment can be a key pathway to work.

Important contribution to town centre renewal

As online retailing grows, the availability and choice of local personal and recreational services is central to attracting people to visit and remain in town centre locations.  Facilitating such services, many of which are provided by sole traders and micro-enterprises, should be integral to local plans for town centre renewal.

At 11.2% of all employment Bundoran has the highest share working in this sector of Ireland’s 200 towns and cities (1,500+ population), largely due to ‘Arts, Entertainment & Recreation’ (Fig. 2).  Carndonagh (10.4%) and Ballyshannon (10.2%) are also in the top 10 towns in Ireland.  Shannon meanwhile has the second highest share working in ‘Administrative & Support’ in the state.

Fig. 2: Percentage of total employment in Administrative, Entertainment & Other Services in towns in the Western Region, 2016. Source: CSO, Census 2016: Profile 11 – Employment, Occupations and Industry, Table EB030

The structure of the sector in the region differs from the national picture

The mainly locally traded personal and leisure services are more important for employment in the region, with less activity in business services (Fig. 3).  The single largest employment activity is ‘Hairdressing & Beauty’ which is significantly more important in the region than the state, the next largest is ‘Services to buildings & landscape’, followed by ‘Sport, amusement & recreation’. The greater importance of locally provided services means the sector relies more heavily on local demand and disposable income.

Fig. 3: Percentage of total Administrative, Entertainment & Other Services employment in each broad sub-sector in Western Region and state, 2016. Source: CSO, Census 2016: Summary Results Part 2, Table EZ011

Some of the implications of this are:

  • ‘Administrative & Support’ less developed but with growth potential: The ‘Administrative & Support’ sub-sector accounts for a lower share of total employment (see Fig. 3) and enterprises (33.5% of all AEOS enterprises v 35.8%) in the region than the state and also experienced lower growth. There is an opportunity to further develop this sector in response to increased outsourcing and strong growth in global business services.  High quality communications infrastructure and property solutions, as well as improved accessibility and the availability of suitable talent are important factors.  Within the region the Shannon Free Zone is a nationally significant location for global business services (e.g. aircraft leasing, e-commerce outsourcing).  Strengthening this cluster to adapt to technological change, meet emerging skill needs and increase collaboration are among the actions needed to support this key regional asset.
  • Local ‘Other Services’ more important and in particular for rural counties: These services largely rely on local demand and respond strongly to disposable income.  As they are often consumed at the same location as they are supplied (e.g. hairdressing, dry-cleaning, nail bars), they play a particularly important role in the local economy of towns and villages.   This sector however is generally quite low paid (at €17.13 per hour ‘Other Services’ has the second lowest average hourly earnings of all economic sectors.[1])  The greater importance of this sub-sector in the employment profile of the region therefore reduces the overall economic benefit of the sector to the regional economy.
  • Role of ‘Arts, Entertainment & Recreation’ in the regional economy is growing: It experienced the strongest employment (13.6%, 2011-2016) and enterprise (12.6%, 2011-2016) growth in the region, in both cases expanding more than nationally. This sector is highly responsive to local disposable income with tourism a key driver. This is clear from its importance in locations such as Bundoran, Strandhill and Clifden.  The Western Region is recognised as having a strong creative and cultural industries sector, as well as tourism industry. The WDC has supported the creative sector’s development through a range of initiatives[2] and the recent Regional Enterprise Plan for the West region[3] included it among its strategic objectives. Adopting a coordinated approach is critical to help realise the growth potential of the creative industries.

For more detailed analysis, including of enterprises in the sector and agency assisted jobs, download Administrative, Entertainment & Other Services in the Western Region: Regional Sectoral Profile here

Pauline White

 

[1] Only ‘Accommodation & Food Service’ is lower. CSO, Earnings, Hours and Employment Costs Survey Q4 2018, Table EHQ03

[2] See https://www.wdc.ie/regional-development/creative-economy/

[3] Department of Business, Enterprise & Innovation (2019), Regional Enterprise Plan to 2020: West Region

Smaller Labour Catchments across the Western Region

Travel to Work Areas and Labour Catchments

Analysis of travel to work data can be used to identify the geographic catchment from which a town draws its workforce, otherwise known as its labour catchment. Measurement of labour markets based on Travel to Work Areas (TTWAs) has been well established in the UK for many years, helping to inform various public policies ranging from employment to transport provision. Companies and large employers use TTWAs to help identify optimal locations to access labour supply.

The use of TTWAs is less well established in Ireland, and where used has largely been focussed on the larger cities especially Dublin. There has generally been little focus on labour catchments in other centres or more rural regions.

The Western Development Commission (WDC) has worked with the All Island Research Observatory (AIRO) to examine the labour catchments of towns across the Western Region based on Census of Population data 2006 and 2016. The town labour catchments show that area from which a town draws most of its labour supply; each catchment is based on the inclusions of Electoral Divisions (EDs) that are assigned to a town, based on commuting to work flows.

Last year the WDC published the findings on the labour catchments of the principal towns of the seven counties of the Western Region (Galway, Ennis, Sligo, Letterkenny, Castlebar, Roscommon and Carrick-on-Shannon). The full report Travel to Work and Labour Catchments in the Western Region, A Profile of Seven Town Labour Catchments is available for download here (14.2MB). Each of the individual town reports are also available to download separately (Galway City, Sligo Town, Ennis,  Letterkenny, Castlebar, Carrick-on-Shannon, Roscommon).

The WDC is now publishing the findings of the other smaller catchments across the Western Region. This is the first time such detailed labour market analyses have been undertaken for the smaller centres across the Western Region. These data and findings can inform local and regional economic development and help support appropriate policies to ensure optimal local and regional development.

Smaller Catchments

The WDC identifies 26 labour catchments, which complement the 7 labour catchments of the principal towns in each of the counties which were published in 2018, see above.

In these 26 publications, the WDC draws on Census 2016 POWCAR (Place of Work Census of Anonymised Records) data to examine the travel to work patterns in centres with a population greater than 1,000 across the Western Region.

These 26 smaller catchments provide insights into the travel to work patterns of workers living there which are then used to generate labour catchments which show the geographic area from which each town draws most of its workers. Each town’s labour catchment has many more workers living there than the Census measure of the town’s resident workforce and it is a better measure of labour supply. This is particularly useful when considering employment and investment decisions.

Socio-economic profiles

Each of the reports identify the place of work of the resident workforce and provides detailed analysis of the socio-economic profile of workers providing information on age, gender, education levels, and sector of employment. There are comparisons with the rest of the Western Region and the State Average. There is also trend analyses indicating the extent of change between 2006 and 2016.

For ease of presentation the 26 smaller catchment reports are presented by County. Below are links to each of the 26 reports. In practice labour catchments extend across county boundaries, indeed that is one of the rationales for considering labour catchments rather than administrative boundaries; people travel to work regardless of county boundaries and these patterns and catchments provide a better evidence base for informing policy.

Some key points include:

  • Labour Supply: All the town labour catchments have significantly more people at work than the Census population at work for that town and have therefore access to a larger labour supply than normal Census definitions would indicate.
  • Profile of ‘Rural’ employment: The profile of employment in these smaller centres provide important insights into ‘rural’ employment, which is much are complex and varied than the perception of rural as largely agricultural employment.
  • Trends: Changes over time, in both place of work and the socio-economic characteristics of workers indicate little change in the geography of labour catchments but much change in the profile of resident workers, most notably in their age and education levels.

County Clare

The two labour catchments within Co. Clare have both recorded an increase in workers resident in the catchments. The Shannon labour catchment is concentrated around the Shannon Free Zone and Shannon Airport and is geographically compact. The Kilrush labour catchment is more extensive and now incorporates a previously separate Kilkee labour catchment. In both there is evidence of longer distances travelled to work than previously.

County Donegal

There are 8 smaller catchments located within Co. Donegal, reflecting the large size of the county, its geography with an extensive border both with Northern Ireland and the sea, and the relatively small size of some of the catchments.

Of the 8 labour catchments, 5 recorded a decline in the number of resident workers in the decade between 2006 and 2016. The three that recorded an increase in resident workers are Donegal, Dungloe and Carndonagh,  illustrating that some more remote areas are experiencing growth.

Each report identifies the top 10 work destinations for residents living in each labour catchment and the extent of cross border commuting is presented.

County Galway

There are 4 smaller catchments located within Co. Galway and just one, Gort labour catchment, recorded a decrease in the number of workers living there over the decade 2006-2016. Clifden, Tuam and Loughrea labour catchments recorded increases of varying degrees. The data presented also shows the extent of commuting between catchments, for example from Tuam, Loughrea and Gort labour catchments to Galway city.

County Leitrim

Apart from the county town labour catchment of Carrick-on-Shannon, there is just one smaller catchment located within Co. Leitrim, namely Manorhamilton. The number of resident workers in the Manorhamilton labour catchment increased over the ten year period and there is data to show more people are now working in Manorhamilton . The influence of some key employers is evident. Data on dross border commuting is also presented.

County Mayo

There are 8 smaller catchments located within Co. Mayo. Just two of the eight recorded a decline in the numbers of resident workers between the period of 2006 and 2016, these were Belmullet and the Charlestown/Knock Airport catchment. The other 6 recorded increases of varying degrees from 31% increase in the Westport labour catchment to an increase of 2.4% for the Ballina labour catchment. The most important places of work across each catchment are presented along with the labour market profiles of workers living there.

County Roscommon

There are 3 smaller catchments located within Co. Roscommon. All 3 recorded a decline in the numbers of workers resident there. In the case of Boyle and Ballaghaderreen, the geographic size of the labour catchments also decreased slightly. The data presented show the sectors in which people worked, the extent to which people worked inside the town and those who worked outside the town but within the wider catchment and the changes over the 10 years. Across all catchments there is a very significant increase in the level of third level education among the workforce.

 

Deirdre Frost