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:
- Industry in the Western Region: Regional Sectoral Profile (69 pages, PDF 3.5MB)
- WDC Insights: Industry Employment in the Western Region (2 pages, PDF 0.2MB)
- WDC Insights: Industry Employment in Western Counties (2 pages, PDF 0.2MB)
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
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.
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
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.
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.