Regions and Recovery?

Discussion of regional performance and the spread of growth are back on the agenda with the preparation of the Regional Action Plan for Jobs and the new National Planning Framework.   The recent CSO publication of the 2012 data on County Incomes and Regional GDP[1] provides some insight into regional performance.

On county incomes the CSO note that of the eight regional authority areas, the Dublin region had the highest average disposable income per person in 2012. At €22,011 it was 13% higher than the State figure of €19,468. Of the remaining seven regions, only the Mid West, at €19,701, had an average disposable income per person 1.2% higher than the State average. The Border region with €17,126 and Midland region with €17,288 fared worst among the eight regions at approximately 12% each below the State average.

The gap between the maximum and minimum value of disposable income per person per region increased from €4,325 in 2011 (revised) to €4,885 in 2012, with Dublin regional incomes increasing by €400 and those of the lowest region, the Midland region in 2011 and now the Border region in 2012, decreasing by €160.

Dublin remains the only region with higher per capita disposable income than the State average during the entire 2003-2012 period while the Midland, Border and West regions have consistently earned less than the State average. For the same period (2003-2012) the CSO note that divergence between the regional authority areas was at its lowest in 2010, with a difference between maximum and minimum disposable incomes of €3,467, but has widened in 2011 and 2012.

county incomes 2012

Source: CSO County incomes and regional GDP 2012

The CSO also published the Regional Gross Value Added (GVA) figures for 2012 and the chart below of GVA per person at Basic Prices, 2003 to 2012, shows the growth in all regions in the period up to 2007 and the effect of the financial crash on all regions. Since then (to 2012) there was continued decline or stagnation in regional output in the Border, Midland and Mid East regions, while GVA growth in the Dublin and the West resumed in 2010.

GVA per person at Basic Prices, 2003 to 2012

Regl GVA per person 03-12

Source: CSO County incomes and regional GDP 2012, Table 9

GVA per person showed considerable variation among the eight regions, with the highest in Dublin €51,839 (151% of the state average) and the lowest in the Midland region (€18,638, 54% of the state average). In the West, GVA per person was €28,256 (82% of the state average) and in the Border region it was €19,016 in 2012, 55% of the state average. Clearly the structure of regional economies is important here. The WDC will produce further more detailed analysis of this CSO data in the coming weeks.

Also last week, as part of its quarterly economic bulletin, the Nevin Institute for Economic Research noted that “concerns persist that the recovery has yet to spread across the country – a phenomenon typified by weak or limited employment growth in regions outside Dublin and its hinterland.[2]

They also considered the meaning of this trend:

“It is not yet clear whether the regional trend represents A) a structural shift in the Irish economy towards the Greater Dublin Area with stagnation or decline persisting into the future in the western half of the country, or, alternatively, B) represents a temporary phenomenon whereby the economy recovery currently taking hold in Dublin gradually extends out to other regions.”  NERI Quarterly Economic Observer (QEO) Spring 2015 Pg 9

While the recovery is underway, it is happening earliest and fastest in Dublin, and while economic growth is very welcome it needs to spread beyond Dublin and other big urban centres. As the WDC noted in its 2010 Policy Briefing “Why care about regions?” the impact of growth in all regions is significant for the national economy as a whole. Lagging regions generate an important part of national economic output and where there are underused resources in lagging regions mobilising them will add to overall national economic growth.

Bringing about convergence is less important than improving the performance of all regions. In order to promote regional growth, policymakers need to develop a comprehensive regional policy which not only links regions through infrastructural investments, but also fosters human capital, and facilitates innovation.  If regional strengths and areas of comparative advantage are taken into account in the implementation of national enterprise policy, it is likely to be far more effective. Hopefully this will be the case in the forthcoming Regional Action Plans for Jobs

 Truly national growth involves growth in all regions. If regional policy is effective it will result in a country with better options for all.

 

Helen McHenry

 

[1] CSO County incomes and regional GDP 2012

[2] NERI Quarterly Economic Observer (QEO) Spring 2015, Pg 1,

International Air Access and the Western Region

Direct international air access is essential to the economy of the Western Region. For enterprises, quality transport links between producers, consumers and suppliers are needed to trade efficiently. Without good international connections, companies in the Region are at a competitive disadvantage compared to others, both within and outside Ireland. Additionally, the ability of the Region to attract new investment is hampered.

Air is the preferred form of travel for most tourists, with 82% of overseas visitors to the West arriving in Ireland by air. The value of direct international air access in supporting regional tourism is significant. Data suggests that those arriving into a Western airport are more valuable as they spend more time in the area. The Western region’s airports offer essential access for incoming visitors, linking into the 2,500 km Wild Atlantic Way route. Ireland West Airport Knock and Donegal airport are the main access points to the Western and Northern sections; Shannon airport to the Southern part.

Connectivity is vital for industry and tourism in the West of Ireland. Shannon airport is the only airport on the Western seaboard with hub connectivity via London Heathrow, although Ireland West Airport Knock has connections to other London airports. There are no other direct links from Shannon or Ireland West Airport to other European hubs. In the event of a decision to sell its shareholding, it is critical that the Government ensures that Shannon and Ireland West Airport maintain existing levels of connectivity to Europe and the US.

The two international airports located in the Western Region; Shannon and Ireland West Airport Knock, along with Donegal regional airport are critical elements of the transport infrastructure of the Western Region. The WDC has previously made a submission to the Department of Transport see here, setting out its views on the formulation of the forthcoming National Aviation Policy, expected later this year.

Deirdre Frost

Agency Assisted Employment in the Western Counties

The WDC published its report on ‘Trends in Agency Assisted Employment in the Western Region’ last week. This included an analysis of data for each of the seven western counties. The main findings for the western counties are:

  •  Galway: In 2013, there were 23,650 people working in agency assisted jobs. Galway has the third highest share in Ireland of agency assisted jobs as a share of total jobs at 23.5%. Over 60% of agency assisted jobs in Galway are in foreign owned companies (2013), this is the highest level for the past ten years. Since 2010 employment in assisted foreign owned companies grew by 19% while in Irish owned it only grew 3%. Modern Manufacturing, which includes medical devices and ICT, is Galway’s largest sector and in 2013 reached its highest level with 8,750 permanent full-time jobs.
  • Clare: In 2013, there were 9,250 people working in agency assisted jobs. Clare has the fifth highest share in Ireland of agency assisted jobs as a share of total jobs at 20.3%. Just over 40% of agency assisted jobs in Clare are in foreign owned companies (2013); this is considerably lower than ten years ago. Since 2010 jobs in assisted Irish owned companies in Clare have remained relatively stable, while foreign owned have continued to decline, with some slight recovery in 2013. Traditional Manufacturing is Clare’s largest sector and has grown since 2011, as has Modern Manufacturing. Assisted jobs in the international services sectors are declining however, which has meant that total assisted jobs have not grown.
  • Mayo: In 2013, there were 8,310 people working in agency assisted jobs. The total number in Mayo is close to the 2006/2007 peak and a higher share are now in permanent full-time jobs. Mayo had the second highest growth in agency assisted jobs in the Western Region in 2013 at 4.9%. There was stronger growth in foreign owned companies (6.1%) than Irish owned (2.7%) in that year. Assisted jobs in Mayo are almost evenly divided between foreign and Irish companies. Mayo’s largest assisted employment sector is Modern Manufacturing, which includes medical devices and chemicals, with almost 3,000 permanent full-time jobs. This is its highest level in the past ten years.
  • Donegal: In 2013, there were 7,850 people working in agency assisted jobs. The biggest change in the county over the past ten years is the rise in the share that are permanent full-time from 78% to 86.3% (2004-2013). The total number of agency assisted jobs in Donegal was up 4.4% in 2013. Donegal has the lowest share of its assisted jobs in foreign owned companies in the Western Region at 38.1%, although this is the county’s highest share of the past ten years. While assisted jobs in foreign owned companies have been growing since 2010, those in Irish owned companies showed their first increase since 2007 in 2013. Information and Communications is the assisted sector with the strongest recent jobs growth, up 30.9% between 2010 and 2013.
  • Sligo: In 2013, there were 3,880 people working in agency assisted jobs. 15.3% of total jobs in the county were agency assisted, which is below the state average (19.3%). Of total agency assisted jobs, 12.5% are temporary/part-time. This is below the Western Region average but the highest level in Sligo between 2004 and 2013. Some 55.6% of assisted jobs in Sligo are in foreign owned companies; lower than a decade earlier. Irish owned assisted employment has grown steadily since 2011 and was up 4.8% in 2013. Sligo’s second largest assisted sector – Traditional Manufacturing – has had the strongest recent growth, up a fifth (21.5%) between 2010 and 2013.
  • Roscommon: In 2013, there were 2,360 people working in agency assisted jobs. Roscommon had the highest growth in such jobs in the Western Region in 2013 at 6%. This growth was driven by Irish owned companies. 2013 was the first year that agency assisted jobs grew in Roscommon since 2007; later than in most other counties. In a national context, the county has a low share of agency assisted jobs. Agency assisted jobs in Roscommon are very concentrated in manufacturing. At 51.2%, the share of Roscommon’s agency assisted jobs that are in the Modern Manufacturing sector, which includes medical devices and pharma, is the second highest in Ireland. The sector showed strong growth in 2013 (6.6%), with Traditional Manufacturing also increasing (10.1%).
  • Leitrim: In 2013, there were 1,310 people working in agency assisted jobs. Leitrim has the highest share of its agency assisted jobs in foreign owned companies (62.9%) in the region and is third highest nationally. Despite this, agency assisted jobs in Leitrim declined in each year between 2004 and 2013. All other western counties, except Clare, have seen some recovery since 2010. While total numbers are declining, Irish owned assisted jobs in Leitrim have begun to recover, up 8.4% in 2013. International Services was Leitrim’s largest agency assisted sector for most of the ten years. In 2012 it was surpassed by Traditional Manufacturing which is now the largest. However, the Modern Manufacturing sector has performed best in recent years with permanent full-time jobs up 8.3% in 2013.

Download the two page WDC Insights, full report and 7 county profiles here

Trends in Agency Assisted Employment in the Western Region

The WDC has today published a new WDC Insights Trends in Agency Assisted Employment in the Western Region as well as a county profile for each of the seven western counties.

Employment in businesses which have received support from one of the main enterprise agencies, which are usually export oriented, is termed agency assisted employment. The WDC has published its analysis of data on these businesses for the Western Region for 2004 to 2013.

Our analysis has found that:

  • Lower recent growth: There was less volatility in assisted job numbers in the Western Region over the period. Assisted jobs in the region have not grown as strongly as in the rest of the country since growth resumed in 2010.
  • More permanent full-time employment: Recent assisted jobs growth in the Western Region is more likely to be permanent full-time with the share of temporary/part-time jobs lower now than at the start of the period.
  • Concentrated by sector: Assisted jobs in the Western Region are more concentrated by economic sector than in the rest of the state and manufacturing activities continue to dominate.
  • Foreign owned sector driving growth: The strongest recent assisted jobs growth has been in the modern manufacturing and information and communication sectors which are the sectors with the highest shares of foreign ownership. The foreign owned sector has driven recent growth in the Western Region to a greater extent than in the rest of the state.
  • Irish owned sector performing less well: There has been much greater volatility in the Irish owned sector over the ten year period and the region’s Irish owned sector is not showing as strong a recovery as in the rest of the country.
  • Urban concentration: Urban concentration, especially in the cities, is a feature of assisted jobs. The resumption of growth does appear to be spreading across the Western Region to some degree, although Clare and Leitrim have seen no increase in assisted employment.

Agency assisted employment is a key policy tool for job creation and unemployment reduction.  Recent growth in assisted jobs in the Western Region has not been as strong as elsewhere, particularly among Irish owned businesses.  Agency assisted job creation in the Western Region needs to focus on increasing sectoral diversity and strengthening the Irish owned sector.  Addressing the lower levels of assisted employment in the counties of the North West should also be a policy priority.

Download the two page WDC Insights, full WDC Report and/or 7 county profiles here