A Tale of Three Regions: GDP in the new NUTS2 Regions

Regional GDP for 2017 has recently been published by Eurostat for 281 NUTS2 regions in the EU28.  This data shows how the different EU regions compare in terms of GDP and how they rank in relation to each other and to the EU average.  This data is of particular interest in Ireland as it is the first data on regional GDP available for the new Irish NUTS 2 regions.  As discussed here and here, instead of two NUTS2 regions in Ireland (the Border, Midland and West (BMW) Region and the Southern and Eastern (S&E) Region) there are now three regions: Northern and Western, Southern, and Eastern and Midland.  The Northern and Western region is very similar to the Western Region under the remit of the WDC[1].  While this is the first GDP data available for the three regions it is expected that the CSO will shortly publish regional GDP data in Ireland for the same years, at both NUTS2 and NUTS3 level, though there may be some issues relating to confidentiality at NUTS3 level which could delay the publication.

Regional GDP over the last decade.

Eurostat has published the data for 2006 to 2017 (although for Ireland the 2017 data is an estimate) allowing for a good examination of the changing output of the three regions, as measured by GDP.  Figure 1 below shows regional GDP (€million) in three NUTS2 regions for that period, highlighting the very different growth trends in the regions in the last decade.

 

Figure 1: Regional GDP (€m) for Ireland’s NUTS2 regions, 2006-2017

Source: Eurostat Table tgs000. 2017 data estimated. https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tgs00003

In 2006 the Northern and Western region accounted for 12% of the national economy, but by 2017 it was estimated to account for only 8%.  GDP in the region had grown by only 5% in that period.  In contrast the Eastern and Midland region economy grew by 47% between 2006 and 2017, while the Southern region’s economy had more than doubled in size (101% growth).  The Irish economy as a whole, as measured here, grew by 59% over that time. The Eastern and Midland has the largest regional economy, accounting for 56% of the national economy in 2006.  This fell to 51% in 2017.  The Southern region accounted for 32% of the economy in 2006 and 41% by 2017.

The level shift in the size of the economy Ireland in 2015 discussed in detail here, is shown clearly in the chart.  The relocation to Ireland by significant Multi National Enterprises (MNEs) of some or all of their business activities and assets (in particular valuable Intellectual Property) alongside increased contract manufacturing conducted abroad (which is included in Irish accounts), all contributed to this shift in GDP.  It is evident that the most significant shift was experienced in the Southern region, previously with the Southern and Eastern regional data combined this was less obvious.  Nonetheless growth in the Eastern and Midland region from 2013 onward was also very significant while the Northern and Western region GDP does not appear to have been affected by the factors which gave rise to the level shift, or to have achieved steady economic growth.

While Figure 1 shows the actual GDP, Figure 2 below shows GDP per person in each of the regions, a format which is more comparable across regions within Ireland and Europe and highlights the very significant widening of disparity among Ireland’s regions.

 

Figure 2: Regional GDP per inhabitant in PPS for Ireland’s NUTS2 regions, 2006-2017

Eurostat Table tgs0005 https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tgs00005

It should be noted that Figure 2 shows the data from 2006 to 2017 in terms of in terms of purchasing power standards (PPS)[2] rather than euro.  The disparity in GDP per person has grown significantly since 2006.  In 2006 GDP (PPS per inhabitant) in the Northern and Western region was 69% of the national average, by 2017 it was only 46%.  Meanwhile, in 2006 in the Eastern and Midland region GDP per person was 115% of the national average and 104% in 2017.  The most rapid change has been in the Southern region where GDP per person was 95% of the state average in 2006 and 122% in 2017.

Data for 2017 was also provided in euros.  The GDP per person in 2017 for the Northern and Western region was €28,400, for the Southern region it was €74,700 (163% higher), for the Eastern and Midland it was €64,000 per person, 125% higher than the Northern and Western region.  Nationally GDP was €61,200 per person.

 

Comparison with EU28 Regions

The GDP per person in the Southern region is 3rd highest (63,000 PPS) of the 323 regions for which there is NUTS2 regional GDP 2016 data, after Inner London West (185,100 PPS) and Luxembourg (76,200 PPS).  The Eastern and Midland region is 8th (54,000 PPS) while the Northern and Western Region lags considerably, in 181st place (23,900 PPS).

Given that the eligibility for the European Regional Development Fund (ERDF) and the European Social Fund (ESF) is calculated on the basis of regional GDP per inhabitant (in PPS and averaged over a three year period) this rank is important.  The NUTS 2 regions were ranked and split into three groups during the programming period 2014–20:

  • less developed regions (where GDP per inhabitant was less than 75% of the EU average);
  • transition regions (where GDP per inhabitant was between 75% and 90% of the EU average); and
  • more developed regions (where GDP per inhabitant was more than 90% of the EU average).

For the programming period 2021-2027, the Commission envisages the continued use of the NUTS classification for determining the regional eligibility for support from the ERDF and the ESF.

In the Southern region in 2017 GDP was 220% of the EU28 average (see Figure 3 below) and the Eastern and Midland region GDP was 189% of the EU average neither region would qualify for the ERDF or the ESP.

 

Figure 3: NUTS2 Regional GDP per person as percentage of the EU average (EU=100)

Source: Eurostat Table tgs0005 Regional Gross Domestic Product (PPS per inhabitant in % of the EU28 average) by NUTS 2 regions. 2017 estimated. https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tgs00006

 

The Northern and Western Region, however, had a GDP of 82% of the EU average in 2016.  It was more than 90% of the EU average in only two of the last ten years (2011 and 2012), although in 2006 it was greater than the EU average at 102%.  It is estimated at 84% of the EU average in 2017 and so it seems likely that the Northern and Western Region will qualify as a ‘transition’ region in the programming period 2021-2027.

Conclusion

There are of course difficulties with the use of GDP as a measure of regional disparities and regional well being (see here and here) but despite these concerns it remains the most important statistic for regional economic activity.  It is essential to our understanding of the changes taking place in Irish regions, although, in order to fully understand regional growth and change, it is important to use GDP in combination with other data such as that on employment, enterprise activity, income, wealth and consumption.

The rapid growth in GDP in the Southern Region and in the Eastern and Midland regions contrasts sharply with the very significantly slower growth in the Northern and Western Region.  The substantial differences in regional GDP per person in 2017 in the three regions, when compared to that in 2006, should be of great concern for Ireland as a whole and for the Northern and Western Region in particular.

 

 

Helen McHenry

[1] The WDC remit covers Donegal, Sligo, Leitrim, Roscommon, Mayo, Galway and Clare.  The Northern and Western region is similar, but includes Cavan and Monaghan and excludes Clare (which is part of the Southern Region).

[2] PPS is the technical term used by Eurostat for the common currency in which national accounts aggregates are expressed when adjusted for price level differences using PPPs.  Basic figures are expressed in PPS, i.e. a common currency that eliminates the differences in price levels between countries allowing meaningful volume comparisons of GDP between countries.

WDC Submission on Draft RSES for Southern Region

This week the WDC made a submission to the public consultation being held by the Southern Regional Assembly on their Draft Regional Spatial and Economic Strategy.  The submission is available here.

As we’ve provided substantial input previously (available here) to the preparation of the Draft RSES, in this submission we mainly comment on the specific text and content of the Draft RSES document.

County Clare is the only county within the Southern Assembly region that is also under the remit of the Western Development Commission, therefore this submission largely focuses on the questions as they pertain to County Clare.

Some of the general comments contained in our submission include:

Role of Ennis

Apart from Ennis being a key economic and residential centre, Ennis is the county capital and link to rural parts of County Clare. This role is clearly evident in the extent of the Ennis labour catchment which extends across much of the County, with the exception of the Kilrush labour catchment to the south west of the county and the Shannon labour catchment to the south, see Travel to Work and Labour Catchments in the Western Region (WDC 2018) here. This role should be maintained and harnessed to support the growth and development of Rural County Clare.

Our Region’s Economic Engines

Discussion of ‘achieving convergence between where people live and work’ needs to recognise the opportunity of remote working, either for people to work from home or a hub located close to their home.  It also needs to be recognised that job creation in smaller towns, villages and rural areas is another route to such convergence and pursing such convergence should not solely focus on building more houses in cities and other large urban centres.

Galway-Ennis-Shannon-Limerick (GESL) Economic Network

The Galway-Ennis-Shannon-Limerick Economic Network is actually a segment of the Atlantic Economic Corridor. It may currently be the most cohesive segment, given the proximity and strong ties between the centres, especially Limerick-Shannon and Ennis centres, with increasing economic activity between Galway, Ennis and Limerick supported by recent investments in improved transport connectivity especially the M18. This network can help support regional growth in both the Southern and Northern and Western Regions. In addition this segment of the network can point to how to improve and develop the cohesiveness of the broader Atlantic Economic Corridor.

Shannon Airport

The role of Shannon Airport needs to be further supported and enhanced. Though the National Aviation Policy (2015) does recognise the key role of Shannon Airport, the policy was developed well before the National Planning Framework which attempts to redirect growth away from ‘business as usual’.  However since then, there is ever greater concentration of international traffic at Dublin Airport. The RSES should advocate for a revised National Aviation Policy so as to fully support the regional population and employment targets. In the absence of a change in policy it is not clear how the Airports and Ports in the Southern Region can realise a stable or ideally a growing share of traffic.

 Limerick-Shannon MASP

The Limerick-Shannon MASP is different to others in that it is connecting two separate urban centres, albeit economically interdependent urban centres. As Limerick is the larger centre there is understandably much focus on it. The focus is also on connecting Limerick and Shannon Airport/Free Zone. The development and transport requirements of Shannon town itself should also be prioritised, to promote Shannon as an attractive place to live as well as work.

The full submission is available here.

Following the public consultation (which closed on 8 March) the SRA will prepare a report on issues raised in submissions/observations and recommend whether the RSES should be made with or without amendments. It may necessary to hold another phase of public consultation before the RSES can be finalised. You can check for updates on the process here.

 

Deirdre Frost

How important is Industry as a regional employer?

We’ve just published the fourth of our ‘Regional Sectoral Profiles’ analysing employment and enterprise data on specific economic sectors. The latest report examines Industry which is the Western Region’s largest employment sector, with 45,754 working in it.  Industry includes mining, utilities and waste management but by far the largest element is manufacturing.  Three publications are available:

Trends in Industry employment in the Western Region and its counties

Industry’s share of total employment has changed considerably over the past two decades (Fig. 1).  Ireland’s move to a more service-based economy, with substantial losses of traditional, lower skilled Industry and a growing focus on high value, high-tech manufacturing, has substantially changed the significance and nature of industrial activity in Ireland and the region.

In 1996 21% of total employment in the Western Region was in Industry, the share declined in every Census to a low point of 13% in 2011, increasing somewhat to 13.7% by 2016.  The state showed a similar pattern declining from 20.4% in 1996 to 11.4% by 2016.  While both region and state followed similar patterns, the gap between them widened over the period so that in 2016 Industry was notably more important as an employer in the Western Region.

Fig. 1: Percentage of total employment in Industry in Western Region and state, 1996-2016

Source: CSO, Census 2016: Summary Results Part 2, Table EZ011; CSO, Census of Population 2006, Volume 7 – Principal Economic Status and Industries, Table C0713; CSO, Census of Population 2002, Volume 5 – Principal Economic Status and Industries, Table B0513; CSO, Census of Population 1996, Volume 5 – Principal Economic Status and Industries, Table  A0513

At a county level, the most dramatic change occurred in Donegal; from over 1 in 4 working in Industry in 1996 to less than 1 in 10 twenty years later.  Donegal’s economy has been dramatically restructured, with a strong shift from manufacturing to services.  At just 9.2% of all employment, Donegal has the smallest share working in Industry in Ireland, outside of Dublin.

In 1996, Clare had the second highest share in the region working in Industry, largely due to the Shannon Free Zone. With the dramatic decline in Donegal, Clare had the region’s highest share for much of the period but was overtaken by Galway County in 2016.  From having the region’s second lowest share in 1996, Galway County now has the highest share working in Industry in the region at 16.3%.  Industry is the single largest employment sector for Galway County, Galway City and Clare.

At town level, Ballyhaunis in Co Mayo has the highest share of its employment in Industry among Ireland’s 200 towns and cities, where it accounts for 41.9% of total employment.  Shannon in Co Clare is fourth highest nationally at 31.9% with Tuam also in the top 10 towns at 25%.  The region is also home to the two towns in Ireland with the lowest shares working in Industry in Bundoran (3.5%) and Carndonagh (4.9%), both in Co Donegal.  It must be noted that this refers to the town where a person lives though they may work elsewhere.

Employment in Industry sub-sectors in the Western Region

The Medical & Dental Instruments (MedTech) sector is by far the largest industrial activity in the Western Region accounting for 27.7% of the region’s total Industry employment (Fig. 2), more than twice the national average (12.1%).

The region’s second largest (14.1%) is Chemicals, Pharmaceuticals, Rubber & Plastics (Chemicals & Pharma) which is the largest in the country (18.4%).  The manufacture of pharmaceuticals is the main activity.

Food, Drink & Tobacco (Agri-food) is the region’s third largest sub-sector with meat processing, bakery/confectionary, seafood and beverages the main activities. Agri-food’s share of industrial employment in the region (11.2%) is considerably smaller than nationally (17.1%). This is partly due to the strong concentration of such activity in the other regions and the nature of the Western Region’s farming.

There are differences across counties in the relative importance of the sub-sectors. For Galway City, Galway County and Leitrim, the MedTech sector is the largest industrial employer.  For Sligo and Mayo, it is Chemicals & Pharma, while for Donegal and Roscommon Agri-food is largest.  Computer & Electronic Equipment is Clare’s main industrial employer. Further detail on the industrial profile of the western counties can be found here.

Fig. 2: Percentage of total Industry employment in each sub-sector in Western Region and state, 2016

Source: CSO, Census 2016: Summary Results Part 2, Table EZ011

Transport Equipment experienced the largest percentage growth in employment in the Western Region between 2011 and 2016, increasing by 52.7% (+451 people).  The region had far greater growth than nationally (15.5%). This sector includes companies such as Valeo Vision Systems in Tuam, Mirror Controls International in Leitrim, McHale Engineering in Mayo and Lufthansa Technik Turbine in Clare.

The next highest growth was in the region’s largest sub-sector, MedTech where employment grew by 30.2% (+2,935 people), followed by Computer & Electronic (21.2%, +633 people).  Very strong growth in these three high-tech manufacturing sectors contributed substantially to the region’s stronger than average performance, with total Industry employment growing by 13.7% compared with 9.4% in the country as a whole.

Key Policy Issues

Industry plays a considerably greater role in the region’s economy and labour market than nationally.  Its performance, and future trends in manufacturing, will have a greater impact in the region.  Given the growing role of services nationally, and increasing policy focus on attracting and growing international services, it is vital that manufacturing’s central role in the Western Region’s economy is fully recognised and supported in policy decisions.  There also needs to be a strong focus on developing new growth areas to increase industrial diversification.

The region has a higher reliance on foreign owned firms.  Global developments which impact on the extent and nature of foreign owned investment in Ireland would have very significant knock-on impacts on the regional economy, not only for direct jobs in foreign owned manufacturing, but also Irish owned sub-suppliers.

Digital transformation poses a threat to certain jobs but also creates new occupations and activities.  Manufacturing has already evolved substantially and adopted many digital technologies.  Processing and operations jobs, especially manual work e.g. packing, are now most at risk from automation.  Upskilling of the current industrial workforce should be a key regional priority.

The nature of work and skills needs are changing.  The share of jobs that are permanent full-time is declining and it is important that policy adapts to ensure that the rights and obligations of individuals and employers are clearly outlined and protected, for example in relation to training and upskilling. Industry’s skill needs are changing with areas of current demand including science and engineering, craft skills and operatives with digital skills.  As Ireland’s manufacturing sector continues to evolve there will be growing demand for STEM qualifications.

The Western Region is a global location for MedTech. The cluster includes multinationals and Irish start-ups supported by a strong skills base and research infrastructure. Life Sciences, including MedTech and Chemicals & Pharma, is present in all counties but strongest in Galway, Sligo and Mayo. It is a key regional asset but its dominant role presents some risk. Opportunities for convergence with other sectors and dissemination of its expertise should be supported to promote industrial diversification.

Activities which rely on domestic demand or the UK market face challenges. These sectors play a larger role in rural counties, have high levels of Irish SME activity and are important for male employment.  Manual tasks are vulnerable to automation and Brexit presents a threat, especially for Agri-food.  Improving the competitiveness, as well as market and product diversification, of such firms will be important to sustaining the regional and rural economy.

The region has an emerging strength in Transport Equipment. For Galway County, Mayo and Roscommon it was the strongest growing sector and Leitrim has the highest share in the country.  Many of the companies are located in medium-sized or small towns and opportunities to further embed and strengthen this emerging cluster should be supported.

For more detailed analysis see ‘Industry in the Western Region: Regional Sectoral Profile

Data on agency assisted jobs in Industry in also analysed in the report, and will be the topic of a future blog post.

Pauline White

Capacity at Ireland’s State Airports – WDC Submission

WDC Submission on the Consultation on Review of Future Capacity Needs at Ireland’s State Airports

The WDC made a submission to the Department of Tourism, Transport and Sport on the Consultation on Review of Future Capacity Needs at Ireland’s State Airports, December 2018. Some of the key points noted are outlined below.

International Air Access

International air access is particularly important for an island economy and for connecting geographically remote regions such as the Western Region.  Without efficient air access, companies in the Region are placed at a competitive disadvantage to companies elsewhere. Infrastructure is a necessary condition for regional development and lagging regions need to have a similar quality of infrastructure as is available in more successful regions so that they can compete on a more level playing field[1]. There are two airports, Shannon and Ireland West Airport Knock, which are located in the Western Region and offer a range of international air services[2].

An EU report measuring potential accessibility by air (using an index where EU 27 = 100), found that Dublin was the only region within Ireland above the EU average, measuring 135.[3] The Border region[4] (60.2), West region[5] (66.5) and Mid-West region[6] (80.6) all recorded accessibility scores considerably below the EU average. Since this analysis there has been a reduction in air services to the regional airports through the reduction of PSO services which would suggest a lower accessibility score for the Northern and Western regions than that measured in 2009.

Nationally, the airports of Dublin, Cork and Shannon are the most important international access points. Unlike much of the country, most of counties Mayo, Sligo, Leitrim, Donegal and part of Roscommon and Galway have a greater than two hour drive-time to these airports. These centres are not adequately served by the three larger airports and Ireland West Airport Knock as the only international airport in the Northern and Western (NWRA) region, serves this catchment.

Policy Context National Planning Framework, Ireland 2040 NPF and RSES

The National Planning Framework (NPF) published in February 2018, is a planning framework to guide development and investment to 2040. Regional Spatial and Economic Strategies (RSES) are currently being prepared and are to give more detail at a regional level as to where growth should occur. A key element in the NPF vision is set out on page 11.

We need to manage more balanced growth … because at the moment Dublin, and to a lesser extent the wider Eastern and Midland area, has witnessed an overconcentration of population, homes and jobs. We cannot let this continue unchecked and so our aim is to see a roughly 50:50 distribution of growth between the Eastern and Midland region, and the Southern and Northern and Western regions, with 75% of the growth to be outside of Dublin and its suburbs.

In order to ensure the NPF can succeed, departmental and State and Semi-State Agency expenditure decisions and allocations, including the National Investment Plan need to be fully aligned with the spatial priorities outlined in the NPF and RSES.

Current policy

The National Aviation Policy predated the publication and consideration of Ireland 2040, both the National Planning Framework and the Regional Spatial and Economic Strategies. The national aviation policy can be seen to unduly reinforce the dominance of the larger airports (Dublin in particular).  Now that the NPF is Government Policy, the National Aviation Policy should be reviewed and reassessed in light of the overarching objectives of the NPF.

 Even aside from the NPF and RSES, Irish Aviation policy should ensure that policy on air access should be linked to and consistent with tourism and enterprise policy objectives. National aviation policy also needs to fully recognise the international transport function Ireland West Airport Knock provides, ensuring direct international air services to a region much of which is not in the catchment of the other international airports, Dublin, Cork and Shannon.

Increasing dominance of Dublin Airport

  • The focus of investment and ever greater expansion in this Review is at Dublin Airport despite the spare capacity at the other three main airports and the ability of these airports to serve their catchments and help drive further development in their regions. The current focus on Dublin Airport only serves the ‘business as usual’ scenario and militates against each of the other airports fulfilling the role envisaged of them and delivering better regional balance.
  • Exports: In late 2018, the Irish Exporters Association (IEA), in its policy paper titled, ‘Building a transport infrastructure that fosters Irish exports to the world’, noted that Ireland’s regions form an important counterbalance to Dublin’s economic strength. Further growth, however, is stalled by limited accessibility to high-class transportation infrastructure. Addressing connectivity in Ireland’s West, in particular, should be a strategic priority to support economic growth and regional competitiveness… The IEA specifically cited the increasing dominance of Dublin airport as an issue.
  • The Costs of Congestion: The Department of Transport, Tourism and Sport has undertaken research estimating the costs of congestion in the Greater Dublin Area (July 2017). Further growth at Dublin Airport will only exacerbate this.
  • The report addresses ‘Options for making best use of existing infrastructure’ but focuses on Dublin Airport (section 5.1.1, pages 105).The WDC believes the best use of existing infrastructure would be by promoting further traffic at Shannon and Cork and the regional airports such as Ireland West Airport Knock. This was the explicit policy position of Government as set out in the National Aviation Policy.
  • The increasing dominance of Dublin Airport in terms of national market share is likely to result in stranded asset issues and increasing spare capacity at the other international airports, Shannon, Cork and Ireland West Airport Knock.

Other Policy Options

The WDC submission also identifies Future Capacity Needs at Ireland West Airport Knock and the value of wider economic impacts for example in the Tourism sector.

The Submission also identifies policy supports which can help support increased passenger growth and an increased share of passengers at Ireland West Airport Knock and at Shannon Airport. These include route support, route development and airport enterprise promotion.

The WDC submission to the Department of Transport, Sport and Tourism on the Consultation on Review of Future Capacity Needs at Ireland’s State Airports can be downloaded here (696 KB)

[1] WDC, 2010, Why care about regions? A new approach to regional policy

[2] Donegal airport provides services to and from Dublin and Glasgow.

[3]www.espon.eu/export/sites/default/Documents/Publications/TerritorialObservations/TrendsInAccessibility/accessibility_data.xls

[4]  Donegal, Sligo, Leitrim, Cavan, Monaghan and Louth

[5] Galway, Mayo and Roscommon

[6] Clare, Limerick and North Tipperary

Electricity Generation and Demand in the Western Region- A Renewable Story

The Western Region has some of the best resources for on shore wind generation in Europe, and in the future, as technology improves, for offshore renewable energy.  The draft National Energy and Climate Plan (NECP) submitted to the EU and published yesterday (19.12.18) made a number of commitments for 2030 in relation to electricity generation and use, including the following:

  • Renewables in our power system will rise from 30% to at least 55% with a broader range of technologies likely to be deployed, e.g. offshore wind, solar, biomass
  • Coal and peat will be removed from electricity generation which will almost halve the emissions from the electricity sector.
  • Penetration of electric vehicles into our transport fleet will build to around 20%.

These will all have a significant impact on how we will generate and use electricity.  It is therefore useful to understand the current pattern of generation and demand in the Region before considering options for the future.

The Western Development Commission (WDC) has recently conducted[1] a review of electricity transmission infrastructure in the Western Region. It examined current and future needs for transmission infrastructure in the Region, and considered how increased renewable electricity generation, along with new ways of using and managing electricity and new methods of improving the use of existing transmission infrastructure might impact on need for investment.  We have published a summary of its findings in WDCInsights Electricity Transmission for Renewable Generation- What’s needed in the Western Region?

In this post the focus is on current and future renewable generation connections in the Region.  Next year, when we have had the opportunity to review the draft NECP and consider the “all-of-Government” Climate Action Plan to be completed in early 2019, it will be clearer what renewable generation connections will be required further into the future, and from that, what further transmission investment will be important.

 

Electricity Generation in the Western Region

The Western Region already has a significant connected renewable generation; almost half of the generation in the Region is renewable (Figure 1).  There is 1,371MW of conventional generation. This capacity is mainly across Moneypoint coal fired power station in West Co. Clare (863MW), Tynagh gas fired power station in East Co. Galway (404MW) and Tawnaghmore oil fired peaking plant in North Co. Mayo (104MW). In 2017 these power stations generated 4,390 GWh, which was approximately 15% of the national demand in 2017.

Figure 1: Generation in the Western Region

Source: www.esb.ie, www.eirgrid.com and MullanGrid Consulting

There is 165MW of hydro generation in the WDC region. This capacity is mainly at Ardnacrusha hydro station in Co. Clare (86MW) and the Erne stations (65MW) in Co. Donegal.  On shore wind generation makes up the rest of the renewable electricity generation in the Region (the locations are discussed further below).

In the future with the ending of coal fired generation as committed to in the draft National Energy and Climate Plan, the vast majority of renewable electricity generation in the Western Region will come from onshore wind and other developing sources including solar and potentially offshore wind and marine generation.

 

Demand and Generation connections in the Western Region

There is substantially higher capacity of both renewable and conventional generation compared to demand in the region.  Renewable generation currently connected (1,343MW) produces approximately 3,750GWh of renewable electricity. Considering total peak demand of 651MW and assuming the nation-wide demand capacity factor of 65%, the total demand in region is approximately 3,700GWh.  It can be concluded that on an annual basis the Western Region is currently producing enough renewable generation to meet 100% of its own demand.   By 2020 the Region will definitely be a net provider of renewable electricity to the rest of Ireland making a significant contribution to the 2020 RES-E targets.

Figure 2 shows the levels of connected renewable generation in the region (1,343MW) and conventional generation (1,371MW) as discussed above.   Maximum demand (at peak) was estimated by MullanGrid as 651 MW with minimum demand 164MW.

Figure 2: Current Generation and Demand in the Western Region

Source: www.esb.ie, www.eirgrid.com and MullanGrid Consulting

By 2020 there could be approximately 1,760MW of renewable generation connected in the WDC region, 1,595MW of wind generation and 165MW of hydro generation. There is a further 1,000MW of renewable generation in the WDC region that will have contracted or been offered connections by mid-2019 (as shown in Figure 2 above) and there is 173MW of further potential on shore wind connections in the short term (as allocated under the Enduring Connection Policy Phase 1 (ECP-1)). Clearly the potential for renewable generation and the opportunities the Region provides are significant.

 

Generation and Demand at County level

It is interesting to look briefly at the patterns of generation and demand at county level in the Western Region (Figure 3).  Donegal, which has the third largest connected capacity of on shore wind generation in Ireland, is clearly significant force in the Region’s transition to renewable electricity.

It currently has 480 MW of connected renewable generation with significant hydro generation (75MW) and 405MW capacity of wind generation with a further 254MW of contracted generation.  Galway and Clare and the next most important counties for renewable generation, with Ardnacrusha making a significant contribution (86MW) in Clare, while most of Galway’s renewable generation (286MW) from wind.  These counties have high levels of contracted wind generation which will be connected in the short term.   Mayo currently has 83MW of connected wind capacity  but has 406MW of contracted generation to be connected.

Figure 3: Generation and Demand in Western Region counties

Source: www.esb.ie, www.eirgrid.com and MullanGrid Consulting

In all Western Region counties currently connected renewable generation is well above the average county demand[2].  Table 1 below gives the detail of the connected, contracted and ECP-1 capacity in each county in the Western Region alongside the estimated demand in each county (although Sligo and Leitrim are considered together).

Table 1: Connected, Contracted and future renewable generation and Demand in Western Region counties.

Source: www.esb.ie, www.eirgrid.com and MullanGrid Consulting

 

Transmission Capacity

The transmission system has been essential in enabling the Western Region to achieve these relatively high levels of renewable generation.  There has been substantial investment in the transmission network in the Region[3] the majority of which, recently, has been in upgrading the existing electricity transmission network to provide additional capacity.  However, to allow for the continued growth of renewable generation in the Region, further investment in new transmission infrastructure is required.

There is capacity in the current transmission system for more renewable generation in areas of the Western Region including large parts of Co. Roscommon, Co. Clare and Co. Galway.  However there is concern about the pace and scale of development of new transmission circuits elsewhere in the Region.  The areas of particular concern in the medium term are Co. Donegal and North Mayo.  In Donegal, by 2022, it is expected that the connected renewable generation will have exceeded the capacity of the existing transmission system.  While the planned North Connacht project[4] will provide critical infrastructure for currently connected and some of the planned renewable generation in development in North Mayo/West Sligo, it will not provide ffor further renewable generation in the area. In the medium to long term there could also be a need for new transmission circuits to Co. Sligo/Co. Leitrim. Considering the extended timelines (at least 10 years) to deliver new transmission infrastructure it is essential to take a long-term view of the generation needs and potential in these areas.

It is important that there is a three-pronged approach to developing the transmission grid in the Region:

  1. Upgrading existing transmission infrastructure;
  2. New transmission infrastructure;
  3. Implementing smart grid solutions.

Although new transmission infrastructure is the most challenging to deliver it is critical for the development of more renewable generation in the Region.  Other factors that will impact on growth of renewable generation are the planning process and the public acceptance of onshore wind generation. Recent new transmission projects have faced strong local opposition and a lack of local political support.

To achieve long term ambitious climate action increased renewable electricity generation will be essential. Therefore further investment in transmission grid with sufficient capacity for new generation connections is crucial.

 

Helen McHenry

 

[1] The Electricity Transmission Infrastructure Review for the Western Development Commission was conducted by MullanGrid Consulting.

[2] This is a simple average of minimum and maximum demand.

[3] EirGrid and ESB Networks, regulated by the Commission for the Regulation of Utilities (CRU), invest in and develop the electricity grid.

[4] http://www.eirgridgroup.com/the-grid/projects/north-connacht/the-project/

WDC Brexit Study and Document Repository

Given current discussion of Brexit and the form it may take, today is probably a good day to let you know about the WDC Brexit Repository.

As I noted last year there has been much discussion of Brexit and what it will mean for Ireland, for businesses here, for different sectors, and for social and cultural interactions.  The discussion was then (October 2017), and is now, of course, taking place in the context of multiple unknowns.  Nothing can be said definitively about Brexit and how it will impact on the region and communities most affected by the border.  Some of the issues were considered in this post and in this presentation (PDF 1.2MB).

Despite the lack of information and lack of certainty, it is still important to consider possible implications and to look at data that could give us a better understanding of what might occur and what policy might be needed to mitigate or address the issues that could arise from Brexit.

The WDC has, therefore, put together a ‘Brexit repository’ which is a PDF document (1MB) containing brief summaries and links to selected Brexit studies and documents on Brexit and its potential impacts which are relevant to businesses, large and small, and to communities and organisations which may be impacted by Brexit.

The PDF will be updated quarterly as new studies are published or as we become aware of older, relevant studies.  It is not an exhaustive list but a collection of documents which may be useful.  If you have any documents or studies which you think should be added please get in touch.

And perhaps by Friday 29th March 2019 the form of Brexit and its implications will finally have become clear.

 

Helen McHenry

Energy and Climate Action in the Western Region- what is the way forward?

The Western Development Commission (WDC) recently made a submission to the Initial Consultation on Ireland’s National Energy and Climate Plan 2021-2030 (NECP).  This consultation was based on the template for the draft plan which Ireland is required to complete by the end of the year. The draft plan, once completed, will itself be the subject of a separate consultation process.  The WDC response focused on areas on which we work and on issues of key importance to the Region including rural issues, renewable energy and biomass use and electricity and natural gas transmission infrastructure.  The full WDC submission is available here.

Rural Issues

The Western Region (the area under the WDC remit) is very rural. 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.

Not only is the Western Region is very rural, it is important to also remember in regard to this Plan, that Ireland is one of the more rural members of the EU. It is critical, therefore, that the NECP takes this pattern of living into account and addresses the opportunities it provides as well as the challenges. Climate action for rural areas is not often discussed in policy and there is no significant body of work (internationally or nationally) on climate change and emissions issues for rural areas in developed countries and yet there are important differences in energy use patterns and emissions, in rural areas. While it is often acknowledged that rural dwellers have higher individual emissions the ways of addressing these are not usually explored partly because emissions reductions may be more difficult to achieve in rural areas and partly because the focus is usually on larger populations and ways to reduce the emissions of individuals living in more densely populated areas.

It should be remembered that, as in other policy areas, urban/rural is a rather simplistic division, which ignores the ‘suburban’ and the differences between rural towns and the open countryside which all have distinctive emission patterns. It is also important to be aware that people’s carbon footprints are closely linked to their incomes and consumption patterns and so do not necessarily relate directly to their location (urban or rural). In fact research in Finland[1] has highlighted higher emissions from urban dwellers based on their higher consumptions patterns. Nonetheless, despite the difficulties with a simple urban/rural dichotomy, there are of course concerns specific to rural dwellers emissions that deserve consideration.

Electricity, heat and transport are the three forms of energy use and therefore the source of emissions, for residential and commercial users and so the different urban and rural use patterns for each of these should be considered.  For more discussion of rural dwellers and climate mitigation see this post.

The WDC believes that it is essential that part of the NECP should have a specific focus on issues for rural areas, and actions to ensure that rural areas are in a position to benefit from a move to a low carbon economy (and there are many opportunities for them to do so) and that rural dwellers make a fair contribution to national goals for renewable energy and to actions to mitigate climate change.

Renewable Energy and Biomass

The WDC has been active in developing measures to promote the use of energy (in particular heat) from biomass, assessing biomass availability and the development of supply chains for its local use. Our experience has shown that strategic policy interventions must recognise the wider market environment in order to design and deliver effective, value for money policy and identify actions which result in sustainable market growth.

The WDC has shown that the renewable heat market has the potential to create considerable levels of employment across the Western Region and to provide long-term stable markets for low value wood fuels which can compete with fossil fuels and stabilise energy prices for end users (see here for WDC work on renewable energy).

An OECD report Linking Renewable Energy to Rural Development contains a useful examination of policy options and actions in fifteen OECD regions. It shows how bioenergy can provide greater local and national economic benefits than other renewable energies  and notes that bioenergy policy interventions are typically most effective when delivered at a regional and/or local level where they can be tailored to local resources and conditions.

Energy efficiency

Energy efficiency is one of the most important areas to be addressed in our NECP and this will require strategies for public, private and domestic users. The WDC believes that the public sector should be a model for energy efficiency and for use of renewable energy in heat and transport. In doing so, as well as providing examples and participating in pilot actions, the public sector will be an important customer for businesses in the developing renewable energy or climate action sectors. Given the difficulties of matching supply and demand at local levels in emerging renewable heat markets, public sector investment in energy efficiency and making use of renewable energy in day to day activities will help to stimulate the development of businesses and allow  supply chains to develop securely.

The WDC also believes that it is very important to ensure that local communities are in a position to participate in energy efficiency and renewable energy development projects. Given that a complex mix of policy instruments will be required to incentivise and empower people to achieve 2030 targets, it should be remembered that the SEAI Better Energy Community Programme has delivered almost 10% of the overall Irish energy efficiency target. If there was a suite of additional community supports in addition to the grant aid even more could be delivered. Community groups often lack time, technical expertise, access to finance and financial expertise, bargaining skills, equipment and capacity to complete lengthy grant application documents.

Energy Infrastructure

Electricity transmission

The WDC believes that it is important that we make the most of our opportunities to generate electricity where the best resource is available. For this it is essential that there is investment in transmission infrastructure in areas which have the greatest potential resources.

The WDC recently commissioned a study[2] of current and future needs for electricity transmission infrastructure in the Region.  The Western Region has a significant capacity of connected renewable generation. By 2020 there could be approximately 1,760MW of renewable generation connected in the WDC region, consisting of 1,595MW of wind generation and 165MW of hydro generation. The Western Region is currently producing enough renewable generation to meet 100% of its own demand. By 2020 it will be a net exporter of renewable energy, providing approximately 15% of the total national demand and making a significant contribution to the 2020 RES-E targets.

The Western Region has some of the best resources for on shore wind in Europe, and in the future, as technology improves, for offshore energy generation. It is therefore important to the Region and to Ireland, as well as the rest of the EU, that there is development of significant electricity transmission infrastructure projects in Donegal and North Mayo[3] in order to make the best use of this resource. While there are opportunities to use smart grid technologies to maximise the use of existing transmission infrastructure, further investment in new infrastructure is also needed. Developing electricity transmission infrastructure is a slow process, so it is important that the NECP has clear objectives in this area which can then feed into any new Grid Development Strategy so that EirGrid can develop a transmission grid fit for a low carbon economy in the long term.

Gas transmission

A significant part of the north west of Ireland does not have access to the natural gas transmission grid. As has been discussed by the WDC elsewhere, the development of the gas grid can give rise to significant savings for both commercial and domestic users (see Why invest in gas? Benefits of natural gas infrastructure for the north west). As a lower emission fossil fuel natural gas can also contribute to a reduction in emissions by users who connect and, in the future with the development of renewable gas, there will be further opportunities to lower emissions through its use in place of natural gas.

In addition, a high level study commissioned by government (conducted by KPMG) last year into the Irish National Gas Network examined issues relating to the wider economic costs and benefits of potential extensions to the Irish natural gas network, including decarbonisation, air quality, climate and emissions and regional and rural development benefits. The findings of this study have not yet been published but they should feed in to the NECP. The WDC believes that further focus on the use of natural gas as a transition fuel and on the development of gas transmission in the north west should form a key part of the NECP.

Conclusion

In this post I have outlined some of the key points in the WDC submission to the NECP Initial Consultation.  The WDC believes that the renewable energy and climate action have the potential to create considerable employment across the Western Region and to provide long term stable markets for many low value biological outputs, as well as ensuring that much of the money spent on energy remains in Ireland.  However, in order to make this happen we suggest that high level targets in the NECP should be translated into a regional and local context so they can drive the delivery of a thriving low carbon economy and spread the benefits throughout the country.

 

Helen McHenry

 

[1] Heinonen J and S Junnila, 2011 A Carbon Consumption Comparison of Rural and Urban Lifestyles Sustainability 2011, 3, 1234-1249;

[2] This study was conducted for the WDC by MullanGrid and will be available shortly.

[3] In addition to the North Connacht Project which is currently planned in North Mayo and which is unlikely to have any spare capacity by the time it is commissioned

Payments and income from farming in the Western Region

As discussed in the last blog post on farmers in the Western Region, agriculture is an important sector of Irish economy and particularly important to the rural economy and society.  In this post different measures of payments and income are examined using three different sources.  Data on CAP beneficiaries is available at county level, showing how much is received in each county, while the recently published Revenue data for 2016 provides information on average Farming Income and Gross Income for the ‘farming cases’.  Finally, the National Farm Survey, conducted by Teagasc, provides detailed information on farming income.

Each of these sources is measuring different things for different purposes so it is useful to compare them to add to our understanding of farming in the Western Region.

 

Payments from the CAP.

The Common Agricultural Policy (CAP) contributes a significant amount to the local economy.  In 2016 more than €525m was received from the CAP by the 54,215 beneficiaries in the Western Region (Table 1) with an average of €9,689 per recipient in the Western Region.

Table 1: CAP beneficiaries in the Western Region in 2016

Source: DAFM CAP Beneficiaries Database

Galway (€ 135m) and Mayo (€105m) had the highest receipts and also had the highest numbers of recipients, while Leitrim (€35m) and Sligo (€37m) had the lowest total receipts.  However, when the average receipt is considered (Figure 1) the pattern is different.

Figure 1: Average received by CAP beneficiaries in the Western Region

Source: DAFM CAP Beneficiaries Database 2016

Average receipts in 2016 were highest in Clare (€10,945), Galway (€10,292), and Roscommon (€10,050), but these were still among the lowest in the country (Clare has the 17th highest average receipt, and average receipts in Galway and Roscommon were 20th and 21st of the 26 counties). The four lowest average payments in the country were in the Western Region with Sligo the lowest in the country.  In contrast, the highest average receipts were in Dublin (€19,062 and which has a very small number of beneficiaries (867)) and in the South East with €17,806 the average in Waterford, €17,205 the average in Kilkenny and €16,194 the average in Carlow.

The very significant different in receipts between the Western Region and the South East reflect both farm size, and the enterprise type.

 

Farm Incomes- Revenue Data

In addition to information about numbers of farming cases, data is available from Revenue for both average Gross income and average Farming Income.   The data for Revenue cases from farming is from the Revenue Statistics and Economic Research Branch publication ‘The Farming Sector in Ireland: A Profile of Revenue Data’ available here.

In 2016 nationally there were 137,109 ‘farmer’ cases with an average Farming Income of €21,952.  There were 40,709 ‘farmer’ cases in the Western Region with an average Farming Income of €13,338.  Data for each of the Western Region counties is shown in Figure 2 below.

Figure 2: Average Farm Income by county- Revenue data

Source: The farming sector in Ireland: A profile from Revenue data, 2016 data, published 2018

The lowest average Farm Income is in Leitrim (€10,679), while the highest was in Clare (€16,701), but the seven Western Region counties are the seven counties with the lowest average Farm Income nationally.  Waterford has the highest average Farm Income (€35,026), followed by Kilkenny (€32,408) and Kildare (€32,292)

Interestingly, for farmer cases the Revenue also provides information about the average Gross income.  This includes income from other sources (the two most significant of these are PAYE income from employment and income from other business sources). It therefore includes income from off farm work.  It should be remembered that where couples are jointly assessed this includes the earnings of both.

Figure 3: Average Gross Income and average Farm Income in Western Region counties –revenue data

Source: The farming sector in Ireland: A profile from Revenue data, 2016 data, published 2018

Non farm income is very significant in the Western Region, accounting for most of the income in the farming cases in the Western Region indicating the importance of off farm employment in farming households.

The National Farm Survey

The final source of data on farm income is the National Farm Survey (NFS) which has been conducted by Teagasc on an annual basis since 1972.  The survey is operated as part of the Farm Accountancy Data Network of the EU and fulfils Ireland’s statutory obligation to provide data on farm output, costs and income to the European Commission. A random, nationally representative sample is selected annually in conjunction with the Central Statistics Office (CSO).  In 2016 the sample of 861 farms which represented 84,736 farms nationally.  Pig and Poultry farms are not included in the survey.

Data from the NFS is not available at county level, but Figure 4 below shows the Family Farm Income[1] for 2016 for each of the NUTS 3 regions.

Figure 4: National Farm Survey Family Farm Income by Region, 2016

Source: Teagasc, 2017, National Farm Survey 2016

The Border and the West regions, which account for six of the seven Western Region counties have the lowest Family Farm Income in 2016.  Clare is part of the Mid West region.

Comparing the data.

As Family Farm Income from the National Farm Survey is not available at county level, it is useful to compare the data on CAP beneficiaries and from Revenue tax cases at regional level.  Figure 5 shows the three different payment and income measures for the NUTS 3 regions.

In most regions, except the Border (and it should be noted the NFS does not include pigs and poultry which are concentrated in the Region) the Family Farm Income is the highest figure, while the average Farm Income for Revenue is lower.  As expected, given that it is only one of the elements of farm income, CAP receipts are lower than either income figure.

Figure 5: DAFM receipts, Revenue average Farm Income and NFS Family Farm Income 2016 by Region

Source: Teagasc National Farm Survey, 2016; The farming sector in Ireland: A profile from Revenue data, 2016 data, published 2018; DAFM CAP Beneficiaries Database2016

 

In the Border, Midland and the West Region in particular, the CAP receipts are a higher proportion of income figures, indicating the greater contribution of the subsidies to income in these regions.

Conclusions

While these three different measures are derived from different sources they are all consistent.  The West and Border have lowest income and lowest average CAP benefit as well as lower taxable income from farming.  The pattern of farming is different in these regions, with different enterprise types, smaller farm sizes and greater reliance on off farm income.  Yet farming in these regions is integral to their rural economy, the rural landscape and CAP payments and their multipliers make a significant contribution the local economy.  These are all important considerations when negotiating the next CAP.

 

 

Helen McHenry

[1] Family Farm Income represents the return from farming for the farm family to their labour, land and capital. It does not include non-farm income.  See here for more information.

City Led Regional Development and Peripheral Regions- Conference Report

The Regional Studies Association Irish Branch Annual Conference was held in the Institute of Technology Sligo on Friday 7th September.  Appropriate for the location, it had the theme “City Led Regional Development and Peripheral Regions”.  The presentations are available here.

Figure 1: Dr Chris O’Malley from Sligo IT

The conference covered a range of themes relating to regional development and how urban areas interact with their rural regions.  It was opened by Dr Chris O’Malley from Sligo IT who discussed the role of Sligo IT in the development of industry and manufacturing in the region and the IT’s role as an integrator of national policy at regional level.  Dr Deirdre Garvey, chairperson of the Western Development Commission, welcomed delegates to the conference noting how pleased the WDC was to be sponsoring the Annual Conference.  She also welcomed the fact that the conference was taking place in the North West, given the recognition in the National Planning Framework of the specific challenges for the region and how the National Planning Framework (NPF) and Regional Spatial and Economic Strategy (RSES) process highlight the distinct challenges and opportunities for our predominantly rural region.

These addresses were followed by a very interesting session on the history of Irish planning over the last 50 years.  Dr Proinnsias Breathnach (Maynooth University) presented on regional development policy following the 1968 Buchanan report and its impact on industry locations and spatial development.  Dr Breathnach also presented the paper by Prof. Jim Walsh (Maynooth University) who was unable to attend the conference.  He examined the influence of both the Buchanan report and the 2002 National Spatial Strategy, considered the learnings from these and the factors which will influence the success of the National Planning Framework process.  Finally in this session, Prof. Des McCafferty (University of Limerick) presented on the structural and spatial evolution of the Irish urban hierarchy since Buchanan, and examined urban population data over time and the distribution of population across the settlement hierarchy.  He noted that it was important to understand changes projected by the NPF in the context of historic trends

Figure 2: Dr Proinnsias Breathnach (Maynooth University), Prof. Des McCafferty (University of Limerick) and Deirdre Frost (WDC)

After coffee the session on Regional Strategy and Planning covered a broad range of topics.  Louis Nuachi (DIT) presented on the importance of social and cultural objectives in town planning using a case study of planning in Abuja, the capital of Nigeria.  David Minton, the CEO of the Northern and Western Regional Assembly (NWRA) discussed issues for the development of the North and West in the RSES, some of the historic development of the region and a number of the challenges in developing a region wide approach.  Finally in that session, John Nugent (IDA) discussed the IDA role in attracting Foreign Direct Investment to the region and some of the important factors which influence the location of FDI, including the importance of having a strong indigenous sector already in place and the ways the indigenous and foreign sectors are mutually beneficial.

After lunch international perspectives were provided by Dr Andrew Copus from the James Hutton Institute in Aberdeen and Professor Mark Partridge, the C. William Swank Chair of Rural-Urban Policy at The Ohio State University.

Dr Copus paper  The Scottish City Region Deals – A rural development perspective noted that optimistic assumptions about how a wider functional region benefits from city investments, are commonplace and generally unquestioned, despite meagre evidence of such impacts.   He discussed the two strands of ideas on policy for urban rural development that of polycentricity and rural urban co-operation (theories which are stronger in EU countries and in OECD work), and City Regions (which have tended to have more focus in the UK).  He highlighted the importance of defining what is meant by rural when considering the impact of such regional policies and  he discussed the development and implementation of regional policy by the Scottish and UK governments in Scotland.

He noted that in general in these deals the dominant rationale relates more to “Smart Specialisation” than to any kind of urban rural cooperation, interaction or spread effect concept, but the way growth deals developing for rural areas of Scotland will fit into the Post Brexit rural development landscape remains to be seen.

Figure 3: Audience at the conference

Prof. Mark Partridge’s paper Is there a future for Rural in an Urbanizing World and Should We Care? noted how rural areas have received increased attention with the rise of right-wing populist parties in Western countries, in which a strong part of their support is rural based. Thus, bridging this rural-urban economic divide takes on added importance in not only improving the individual livelihoods of rural residents but in increasing social cohesion.

He discussed the background of rural and peripheral economic growth, noting the United States is a good place to examine these due its spatial heterogeneity.   He showed that, contrary to public perceptions, in the US urban areas do not entirely dominate rural areas in terms of growth.  Rural US counties with greater shares of knowledge workers grow faster than metro areas (even metros with knowledge workers).

He had some clear suggestions for regional policy, noting that governance should shift from separate farm/rural/urban policies to a regional policy though a key issue is to get all actors to participate and believe their input is valued. In rural development it is important to leverage local social capital and networks to promote good governance and to treat all businesses alike and avoid “picking winners.  Rural communities should be attractive to knowledge workers and commuters, while quality of life, pleasant environment, sustainable development; good public services such as schools are important to attract return migrants.  Building local entrepreneurship is key too and business retention and expansion is better than tax incentives for outside investment.

Figure 4: Dr Chris Van Egeraat (Maynooth University)

In the final session ‘Understanding Regional and Urban Dynamics’ I gave a presentation on what regional accounts can tell up about our regional economies and discussed some of the issues associated with the regional data and the widening of disparities among regions.  Dr Chris Van Egeraat (Maynooth University) presented a paper, written with Dr Justin Doran (UCC) which used a similar method to Prof. Partridge to estimate trickle down effects of Irish Urban centres and how they influence the population in their wider regions.  Finally Prof. Edgar Morgenroth (DCU) presented on the impacts of improvements in transport accessibility across Ireland highlighting some of the changes in accessibility over time and noted that despite these changes human capital is the most important factor influencing an area’s development.

While the conference had smaller attendance than previous years there was good audience participation and discussion of the themes.  The conference papers are now available on the WDC website here and will shortly be available on the RSA website.

 

Helen McHenry

Enterprise in the Western Region 2016

Earlier this week we published our latest 2-page WDC Insights publication.  ‘Enterprise in the Western Region 2016’ analyses the latest data from the CSO’s Business Demography which measures active enterprises in 2016.  This data assigns enterprises to the county where they are registered with Revenue, so if they have multiple locations (e.g. banks, chain stores) they are only counted as one enterprise in whichever county they are headquartered (often Dublin).   Therefore the county data presented here measures businesses which are registered in the Western Region.

In 2016 there were 54,410 total enterprises registered in the Western Region.

To examine the size of enterprises, we can only consider ‘business economy’ enterprises which are a subset of total enterprises (excluding Education, Health, Arts & Entertainment and Other Services).  There were 42,737 ‘business economy’ enterprises in the Western Region in 2016 and 92.7% were micro-enterprises.  Roscommon (94.6%) and Leitrim (94.4%) have the highest shares of micro-enterprises in the state.

Between 2008 and 2016 there was a 4.3% decline in the number of ‘business economy’ enterprises in the Western Region, compared with 3.9% growth in the rest of the state (all other counties) (Fig. 1).  Donegal, Mayo and Roscommon suffered the largest declines in enterprise numbers over the period.

The 2016 data confirms an ongoing recovery in enterprise numbers that began in 2014, with all counties experiencing an increase over that two-year period, Clare and Donegal most strongly.  Although all western counties (and all but seven counties nationally) still had fewer enterprises in 2016 than they had in 2008.

Fig. 1: Percentage change in ‘business economy’ enterprises in western counties, Western Region and rest of state, 2008-2016 and 2014-2016.  Source: CSO, Business Demography 2016

Compared with the rest of the state, the Western Region has a higher share of enterprises in traditional sectors, as well as local and public services (Fig. 2).  With 1 in 5 enterprises in the region involved in Construction, it is the region’s largest enterprise sector and plays a larger role in the region’s enterprise profile. Accommodation & Food Service is another area where the region has a significantly greater share of enterprises, an indication of the important role of tourism.

The knowledge intensive services sectors are of less significance to the region’s enterprise profile, with lower shares in Professional Services, Information & Communications and Financial Services.

The relative importance of sectors to the enterprise profile of individual western counties varies, although Construction and Wholesale & Retail are the two largest for all counties, with Professional Services third largest for all western counties except Donegal where Accommodation & Food Service is third.

Fig. 2: Percentage of total enterprises in each sector in the Western Region and rest of state, 2016. Source: CSO, Business Demography 2016

As noted above, the period 2014-2016 showed growth in enterprise numbers. At a sectoral level, there was growth in all sectors in the region except for a small decline in Transportation & Storage.  The largest percentage growth, albeit from a low base, was in Financial Services with an increase of 15% in the number of enterprises registered in the region, followed by Real Estate (11.5%) and Administrative Services (8%).

For these three sectors, the growth in the region was higher than in the rest of the state, with the number of Financial Services firms actually declining elsewhere in that time. The region also experienced stronger growth than the rest of the state in Industry, Education, Professional Services and Arts & Entertainment.

The CSO also produces data for a composite ‘ICT’ sector which combines elements of ICT hardware manufacturing with IT services, the number of ICT enterprises in the Western Region increased by 11.4% between 2014 and 2016 compared with 9.8% growth in the rest of the state.

The profile of the Western Region’s enterprise base contributes to a number of the issues and challenges faced by the region’s SMEs which the WDC highlighted in its recent submission to the Seanad’s public consultation on SMEs in Ireland. See the blog post here.

Download ‘Enterprise in the Western Region 2016’ here.