Our last blog post examined the role that sectors play in regional GVA. Sectors also have a huge impact on the pattern of jobs growth. Following on from our April WDC Insights publication ‘Jobs Recovery in the Western Region’, the WDC has just published new analysis examining the role that sectors have played in recent jobs trends.
‘Impact of Sectors on Western Region’s Jobs Recovery’ examines some of the causes for the region’s slower jobs recovery.
Lower jobs diversity
There is greater concentration of employment in a few sectors in the Western Region. 62.2% of jobs in the region are in its top five sectors (Industry, Health, Wholesale & Retail, Agriculture and Education) compared with 53.6% in the rest of the state. Greater diversity in employment across sectors is an important aspect of regional resilience and growth.
Traditional and public sectors more important; services less so
The region has higher shares working in the traditional sectors (Agriculture, Construction, Industry) and also Public Services (Health, Education, Public Admin) than in the rest of the state (Fig. 1).
At the same time, there are lower shares employed in Locally Traded (Retail, Accommodation, Transport) and Knowledge (ICT, Finance, Professional) Services. For Locally Traded Services, as these rely on domestic demand, lower incomes in the region compared with much of the rest of the state may be a factor in this. It also helps to explain the region’s higher youth unemployment as these are areas (shops, bars) where young people often find work.
The high-value Knowledge Services sectors is where the region lags the rest of the state most significantly. These are seen as key sectors for growth and their poor performance is a cause for concern.
Strength in manufacturing
Manufacturing plays a more important role in the region’s employment, accounting for 15.6% of jobs compared with 12.2% in the rest of the state. Between 2012 and 2015 growth in manufacturing jobs in the Western Region was more than twice that as in rest of state – 8.3% v 3.4% (Fig. 2). The region’s manufacturing strength has been a key factor in the West’s relatively strong recovery in GVA. Manufacturing is a key regional strength.
Decline in market services sectors
Between 2012 and 2015 there was jobs decline in the three market services sectors (Administration and Other, Locally Traded and Knowledge) in the Western Region, while they grew elsewhere in the state (Fig. 2). This is the main reason for the Western Region’s slower jobs recovery.
Similar to the rest of the state, Agriculture and Construction saw the largest increases in job numbers in the Western Region, driven by strong agri-food exports and a resurgence in building activity.
This WDC Insights shows that slower jobs recovery in the Western Region is mainly due to contraction in market services sectors, in contrast with growth elsewhere. In every year since 2011, the numbers working in the Western Region in both Knowledge Services and in Administration and Other Services has declined. This was during a time of recovery nationally.
While the region’s strong manufacturing base and Public Services employment have compensated to some extent, it has not been enough to allow the region to enjoy a similar rate of jobs recovery as elsewhere. Optimising growth across all sectors, and addressing challenges in the market services sectors in particular, will be required for a healthier and more resilient regional labour market.
Source: All data taken from a special run of the CSO’s Quarterly National Household Survey, Quarter 1 2012-2015 for the seven county Western Region.