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Regional Sectoral Profiles: The Complete Collection

A year ago we began publishing a series of ‘Regional Sectoral Profiles’ of economic sectors in the Western Region.  Now, 12 months and 12 reports later, the series is complete!  As publication has been spread over a year, I thought it would be useful to provide a synopsis and links to the full series.

So it all began in October 2018 with …

Wholesale & Retail (Oct 2018)

42,510 people were employed in the Wholesale & Retail sector in the Western Region in 2016 making it the region’s second largest employer.  The Western Region is characterised by greater self-employment in Wholesale & Retail than the national average (15.5% of total employment in the sector is self-employment compared with 12.7% in the state) meaning it is characterised by more, but smaller, businesses. Download WDC Insights-Wholesale & Retail in Western Region-Oct 2018 and Wholesale & Retail in the Western Region-Regional Sectoral Analysis-Oct 2018

Health & Care (Nov 2018)

42,027 people were employed in the Health & Care sector in the Western Region in 2016. At 15.5% of all employment, Sligo has the highest share working in this sector in the country, while Leitrim (13.5%) has the 2nd highest share nationally with Galway City and Galway County (both 13%) jointly 4th.  This sector is a hugely important and growing employer in the region.  Download WDC Insights-The Health & Care Sector in the Western Region-Nov 2018 and Health & Care Sector in the Western Region-Regional Sectoral Analysis-Nov 2018 

Education (Jan 2019)

32,349 people were employed in the Education sector in the Western Region in 2016.  Education is most important in Donegal (10.8% of all employment), followed by Galway County (10.2%). These are the highest shares working in Education in the country.  Moycullen (Co Galway) has the highest share of residents working in Education across Ireland’s 200 towns and cities. Within the sector, Pre-Primary education had the strongest recent jobs growth.  Download WDC Insights-Education Sector in the Western Region-Jan 2019 and Education Sector in the Western Region-Regional Sectoral Profile-Jan 2019-rev 12.03.19

Industry (Feb 2019)

With 45,754 working in Industry in 2016, it is the region’s largest employment sector.  It is considerably more important as an employer in the region than nationally (13.7% v 11.4%).  Among western counties, Industry is most important in Galway County, Clare and Galway City, while Ballyhaunis (Co Mayo) has the highest share of jobs in Industry among Ireland’s 200 towns and cities, where it accounts for 41.9% of total jobs.

Medical Devices is the largest activity accounting for 28% of all Industry employment in the region. The region’s industrial sector relies more on foreign owned companies than nationally (55.1% of assisted Industry jobs are in foreign owned companies v 45.3%).  Download WDC Insights-Industry Employment in Western Region-Feb 2019; WDC Insights-Industry Employment in Western Counties-Feb 2019 and Industry in the Western Region-Regional Sectoral Profile-Feb 2019-11.04.19

Accommodation & Food Service (Mar 2019)

23,038 people worked in Accommodation & Food Service in the Western Region in 2016.  Among western counties, it is most important in Galway City, Donegal and Mayo which are among the top 5 in Ireland in terms of the share of their workforce engaged in hospitality.  At 27.6% of total employment, Clifden has the highest share working in the sector in Ireland with Bundoran, Westport, Donegal town and Carrick-on-Shannon also among the top 10 towns.  The region is home to 23.7% of all Accommodation & Food Service enterprises in the state and it’s the sector where the region accounts for its highest share of national enterprises.  Download WDC Insights-Accommodation & Food Service Sector in the Western Region-Mar 2019 and Accommodation & Food Service Sector in the Western Region-Regional Sectoral Profile-Mar 2019

Agriculture, Forestry & Fishing (Apr 2019)

22,733 people were employed in Agriculture, Forestry & Fishing in the Western Region in 2016.  This only includes people whose main economic activity is working in the sector and does not include part-time farmers.  Of everyone working in the sector in Ireland, 1 in 4 of them live in the Western Region making Agriculture, Forestry & Fishing the sector where the Western Region accounts for its highest share of total national employment. Download WDC Insights-Agriculture, Forestry & Fishing Employment in the Western Region-April 2019 and Agriculture, Forestry & Fishing in the Western Region-Regional Sectoral Profile-Apr 2019

Administrative, Entertainment & Other Services (May 2019)

21,789 people worked in Administrative, Entertainment & Other Services in the Western Region in 2016. This sector provides ‘outsourced’ services to businesses, as well as personal and recreation services to individuals.  Bundoran has the highest share working in the sector of all Irish towns.  This sector is characterised by high self-employment, both compared with elsewhere (27.6% in region v 21.5% in state) and with other sectors. The number of self-employed grew by 19.4% (2011-2016) in the region, the highest growth of all sectors. Download WDC Insights: Administrative, Entertainment & Other Services in the Western Region and Administrative, Entertainment & Other Services in the Western Region: Regional Sectoral Profile

Financial & ICT Services (Jun 2019)

17,884 people worked in Financial & ICT Services in the Western Region in 2016. Financial & ICT Services plays a significantly smaller role in the region’s labour market than nationally (5.4% v 9%).  In the region the sector is most important in Galway City, Donegal and Clare.  At 14.3% of total jobs Letterkenny has by far the highest share of residents working in the sector in the region and is 11th highest in Ireland.  Download WDC Insights-Financial & ICT Services in Western Region-June 2019 and Financial & ICT Services in the Western Region-Regional Sectoral Profile-June 2019

Public Administration & Defence (Jul 2019)

18,858 people worked in Public Administration & Defence in the Western Region in 2016.  At 8.4% of total employment, Roscommon has the highest share working in the sector in Ireland with Leitrim and Sligo 2nd and 4th highest respectively.  North Connacht and the North West have high reliance on the public sector to sustain employment.  Lifford (Co Donegal), Strandhill (Co Sligo) and Roscommon town have the 2nd, 3rd and 4th highest shares working in the sector of Irish towns.  Download WDC Insights-Public Administration & Defence in Western Region-July 2019 and Public Admin & Defence Sector in the Western Region-Regional Sectoral Profile-July 2019

Professional Services (Jul 2019)

14,499 people worked in Professional Services in the Western Region in 2016.  It accounted for 4.3% of total employment in the region, far lower that its 6.1% share nationally.  Galway City is where it is most important in the region but it is still well below the state average.  This sector has among the highest rates of self-employment across all economic sectors and is considerably higher in the region than nationally (30.3% v 25.7%).  Download WDC Insights-Professional Services in Western Region-July 2019 and Professional Services in the Western Region-Regional Sectoral Profile-July 2019

Construction (Aug 2019)

18,166 people worked in Construction in the Western Region in 2016. In 2006 Construction accounted for 12.6% of all jobs in the region, by 2016 it was down to 5.4%.  Ballaghaderreen (Co Roscommon) has the highest share of residents working in Construction in the region and 2nd highest nationally.  Despite significant decline during the recession and slower recovery than elsewhere, Construction continues to employ a greater share of the workforce in the Western Region and particularly in more rural counties and towns.  Download WDC Insights-The Construction Sector in the Western Region-Aug 2019 and Construction in the Western Region-Regional Sectoral Profile-Aug 2019

And finally …

Transportation & Storage (Sep 2019)

10,758 people worked in Transport & Storage in the Western Region in 2016.  Clare has by far the highest share working in the sector in the region at 5.2% of employment and is 4th highest nationally due to aviation activity around Shannon. Shannon town (10.8%) has the 4th highest share working in the sector in Ireland with Newmarket-on-Fergus also in the top 10 towns.  There was a 6.3% fall in the number of Transport & Storage enterprises in the region between 2012 and 2017 mainly due to a sharp decline in taxi numbers.  Download WDC Insights-Transportation & Storage Sector in the Western Region-Sept 2019 and Transportation & Storage Sector in the Western Region-Regional Sectoral Profile-Sept 2019

So that’s the complete series of Regional Sectoral Profiles. In some ways it’s fitting that the series is now complete as this will be my final WDC Insights Policy Blog post.

After 16 great years with the WDC I am moving on to take up a new challenge.  I want to thank all my colleagues, past and present, and particularly my Policy Analysis team mates Deirdre Frost and Helen McHenry for all their help, support, encouragement and heated debated! over the years.

Wishing you all the best

Pauline White

Transportation & Storage Sector in the Western Region

The Western Development Commission (WDC) has just published the last in its ‘Regional Sectoral Profiles’ series which analysed the most recent employment and enterprise data for the Western Region on specific economic sectors and identified key policy issues.[1]

The final report examines the Transportation & Storage sector.  This includes activities such as taxis, bus companies, airlines and airports, haulage firms, couriers and services for the transportation sector.  Although it is among the smallest direct employers in the region, it’s significance to the regional economy and society is considerably greater, given its vital role in facilitating business activity, as well as providing services to individuals and communities.  Two publications are available:

Employment in Transport & Storage

According to Census 2016, 10,758 people worked in Transport & Storage in the Western Region.  Transport & Storage plays a smaller role in the region’s labour market than nationally (Fig. 1), accounting for 3.2% of total employment in the region compared with 4.0%. One of the reasons is the high concentration of this sector in Dublin due to the presence of Dublin Airport, Dublin Port, Dublin Bus and the headquarters of airlines and national transport companies

Among western counties, Clare has by far the highest share working in Transport & Storage (5.2%).  This is clearly due to the presence of Shannon Airport and Clare has the fourth highest share of its employment in this sector in Ireland.[2]  Roscommon has the next highest share in the Western Region, likely due to its very central location and the activities of logistics operations. At just 2.2% of total employment, Galway City has the lowest share working in the sector in the region and also in the state.

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

There was 4.5% jobs growth in the sector in the region between 2011 and 2016, higher than the 4.0% growth nationally.  Jobs growth in Transport & Storage was driven by a number of factors including increased demand from commercial clients as business activity recovered and evolving processes demanded more complex logistics and increased consumer and tourism spending. Growth in this sector was lower than overall jobs growth in the region (7.5%) however.

Transport & Storage sub-sectors

‘Postal, Courier, Warehousing & Cargo’ is the largest sub-sector in the Western Region (27% of total employment in Transport & Storage), and accounts for a higher share than nationally (23.8%).  The next largest is ‘Road Freight’ which is also more important in the region (21.2% v 18.4%). This illustrates the importance of the logistics sector in the region, which may not be surprising given its distance from the main international entry and exit points of Dublin Airport and Dublin Port.

In Clare, ‘Other Transport & Storage & Services’, which would include aviation services around Shannon, is the largest sub-sector while for Galway City ‘Taxi operation’ is largest with taxis being far more common in the city than elsewhere.  In Donegal ‘Road Freight’ is the biggest sub-sector and given the potential impact of Brexit on haulage, this is an issue of concern.  For all other western counties ‘Postal, Courier, Warehousing & Cargo’ is largest.

In the region, the strongest jobs growth (2011-2016) was in ‘Road Freight’ with employment increasing by 20% in the region, higher than the 15.9% growth nationally.  Only one sub-sector saw a decline with a 29.2% fall in the number working in ‘Taxi operation’ in the region.  Following growth in taxi numbers with de-regulation, over-supply of taxis in certain areas and increased alternative job opportunities with economic recovery, led to people leaving taxi driving.

Gender pattern and self-employment

Employment in this sector is highly male dominated with men accounting for 79.4% of the total Transport & Storage workforce in the Western Region.  Clare has the highest female share due to activity in aviation, while Donegal, where road freight is the largest activity, has the highest male share.

Of all those working in Transport & Storage, 20.1% are self-employed (employer or own account worker). This is higher than the region’s average rate of self-employment (18.3%).  Galway City (30.8%), Donegal (25.6%) and Sligo (23%) have the highest rates of self-employment and are also where ‘Taxi operation’ is most important.

There was an 18.3% decline in the number of self-employed working in Transport & Storage in the Western Region (2011-2016), the second largest decline of any economic sector.

Employment in western towns

When considering towns, commuting can be particularly important and it must be remembered that this data refers to residents of the towns, although some may travel to work elsewhere.

As may be expected from the previous sections, Shannon (10.8%) has by far the highest share working in the sector among towns in the Western Region (Fig. 2). Nationally, it has the fourth highest share working in the sector in Ireland with Newmarket-on-Fergus (9.5%) also in the top ten.[3] The towns with the next highest shares are also mainly in Clare.

Eight towns in the Western Region are among the bottom ten towns in Ireland in terms of the share working in Transport & Storage.  Six towns in the region have less than 2% of their employment in the sector.

Source: CSO, Census 2016: Profile 11 – Employment, Occupations and Industry, Table EB030

Transport & Storage Enterprises

In 2017[4]  there were 3,291 Transport & Storage enterprises registered in the Western Region. This was 5.7% of total enterprises[5], well below the 7.6% share in the state.  The concentration of this sector around Dublin would be a factor in this pattern.

Galway[6], Sligo and Roscommon have the highest share of enterprises in the sector, though all well below the national average.  As noted above, ‘Taxi operation’ is most common in Galway and includes a large number of enterprises.  Differing from the pattern for employment however, Clare does not have a particularly high share of enterprises in the sector (5.5%) indicating it includes some large employers.

There was a 6.3% decrease in the number of Transport & Storage enterprises registered in the Western Region between 2012 and 2017 (Fig. 3).  This was a poorer performance than nationally where there was a 2.1% decline.  In both areas, the decline in the Transport & Storage sector contrasted with growth in overall enterprises.[7] Looking more closely at the data, there was the first sign of recovery in enterprise numbers between 2016 and 2017, so it could be expected that there has been some growth in the sector in more recent years.

All western counties had considerable falls in enterprise numbers in Transport & Storage, with Sligo and Mayo having the largest declines.  Roscommon and Clare, where the sector is most important as an employer, also had quite large falls in enterprise numbers.

Source: CSO, Business Demography 2017, Table BRA18.

Key Policy Issues

Smaller scale operations and high self-employment: Transport & Storage enterprises in the Western Region tend to be smaller in scale.  Self-employment in the sector declined as the economy recovered, largely due to a drop in the number of taxi drivers. Continuation of existing, and the development of new, initiatives and soft supports for sole traders and micro-enterprises is important to the future of the Transport & Storage sector in the region.

Responds to and facilitates economic growth: This sector depends on the level of activity in the domestic economy as this determines demand from commercial clients and private individuals.  As well as responding to economic growth, it also facilitates it e.g. by providing logistics services to business. Therefore, the presence of a strong Transport & Storage sector within the region, particularly given its peripheral location, is a key driver for regional economic growth.

Further development of the Western Region’s Airports: Shannon Airport plays a strategic national role in the transport sector.  In addition to transport services, there is considerable and growing activity in support services for the aviation industry.  At the same time, increasing international air access via Ireland West Airport Knock is important to improve accessibility for the West and North West.  The National Aviation Policy should be reviewed in order to further increase the role and capacity of these airports and reduce the dominance of Dublin Airport.

Brexit: The haulage and logistics sector will be among those most affected by Brexit.  The sector in Donegal potentially faces particular challenges.  It is important that the impact of Brexit be minimised and that haulage firms are supported in their efforts to adapt.  The Western Region’s peripheral location, and the role of the sector in facilitating wider economic activity, means this is of vital economic importance.

Opportunities in the logistics sector: Highly complex and integrated processes in manufacturing and retail increasingly rely on sophisticated logistics to minimise the time and cost of distribution and supply. In addition, the growth of online retail has greatly increased demand for postal and courier services. Given its central location, Roscommon has particular potential to further develop activity in this area.  Adaption to a low carbon economy is another area of opportunity for the freight sector.  

For more detailed analysis, download Transportation & Storage Sector in the Western Region: Regional Sectoral Profile and WDC Insights: Transportation & Storage Sector in the Western Region here

Pauline White

 

Photo The Shannon Group

[1] Previous Regional Sectoral Profiles are available here https://www.wdc.ie/publications/reports-and-papers/

[2] Fingal (8%), Meath (5.9%) and South Dublin (5.2%) have the highest shares, with Dublin Airport’s influence very clear.

[3] All other towns in the top ten are surrounding Dublin Airport.

[4] Data in this section is from CSO, Business Demography 2017

[5] Total enterprises includes all ‘business economy’ enterprises (NACE Rev 2 B to N(-642)) plus the sectors of Health & Social Work, Education, Arts, Entertainment & Recreation and Other Services.

[6] Business Demography data does not distinguish between Galway City and Galway County.

[7] As Business Demography data is not available for some sectors until 2015, changes over time are not based on ‘total enterprises’ but a sub-set of this called ‘business economy’ enterprises. This is sectors NACE Rev 2 B to N(-642) which is all economic sectors except Agriculture, Forestry & Fishing, Public Administration & Defence, Health & Social Work, Education, Arts, Entertainment & Recreation and Other Services.

New Infographic: Enterprise in the Western Region 2017

The WDC has analysed the latest CSO Business Demography data on enterprises in the Western Region. This data is for 2017 when there were 57,951 total enterprises[1] registered in the seven-county Western Region (location of an enterprise is based on its address as registered with Revenue[2]).  In total, just over a quarter of a million people were working for enterprises registered in the region.

Enterprise in the Western Region 2017

The infographic shows some of the key indicators for enterprise in the Western Region.

The recession led to a 4.3% decline in the number of enterprises[3] in the region, this was compared to marginal growth in enterprises in the state (0.1%) over this period. With economic recovery, enterprise numbers grew again, rising 6.5% in the region between 2012 and 2017. While strong, this growth did significantly lag that nationally (11%).

As growth accelerated considerably between 2016 and 2017, it is likely that enterprise numbers have continued to expand since 2017.

Of all enterprises registered in the Western Region 92.9% were micro-businesses employing fewer than 10 people. This was a slightly higher share than nationally where 92.1% of enterprises are micro.

As each micro-enterprise is small in scale however, despite them accounting for 92.9% of enterprises, only 35.8% of everyone who works for an enterprise, works for a micro-enterprise.  Of course, direct employment is just one of the economic and social impacts of micro-enterprises and they play a particularly vital role in smaller centres and more rural areas, as well as in particular sectors e.g. Construction, Professional Services.

By their nature, larger firms (employing 10 or more people) play a more significant employment role, accounting for 64.2% of everyone who works for an enterprise, despite only accounting for 7.1% of firms.

In terms of the number of enterprises, Construction is the largest sector in the Western Region accounting for 20.4% of all enterprises registered in the region.  Wholesale & Retail (15%) and Professional, Scientific & Technical activities (9.4%) are next largest.  All three sectors include many sole traders and micro-enterprises e.g. construction trades, solicitors, architects, small shops and they are also the three largest sectors nationally.

Considering the number of people working in enterprises however shows a different pattern.  Wholesale & Retail is the largest enterprise sector in employment terms (17.8% of all people working in enterprises in the Western Region) followed by Industry (manufacturing) (17.2%) and Accommodation & Food Service (13.4%). These three sectors include many larger businesses e.g. factories, hotels, large retail stores, so account for a greater share of employment than of enterprises.

County Data

Data for the same indicators that are included in the ‘Enterprise in the Western Region 2017’ infographic has also been published for each of the seven western counties in a ‘Key Statistics’ one-pager.  A few interesting findings for western counties:

  • Roscommon and neighbouring Leitrim jointly have the highest share of micro-enterprises in Ireland (94.7%).
  • While for most western counties Wholesale & Retail, Industry and Accommodation & Food Service are the three largest enterprise sectors for employment, for Galway and Roscommon, Health & Care is in the Top 3.
  • At 9.9%, Donegal saw the largest decline in enterprise numbers in the Western Region between 2008 and 2012 with Mayo (5.3%) having the next largest decline. Sligo was the only western county where enterprise numbers increased over this period (0.9%).
  • Clare had the strongest recovery in enterprise numbers between 2012 and 2017 at 10.4%, close to the national average (11%).

For anyone interested in more detailed analysis, a comprehensive ‘Profile of Enterprise in …’ document is also available for each county. Each 12-page Profile includes data on:

  • Enterprise Trends 2008-2017: Active Enterprises and Persons Engaged
  • Employees as a % of Persons Engaged 2008-2017
  • Enterprises, Persons Engaged and Employees by Enterprise Size 2017
  • Change in Enterprises and Persons Engaged by Enterprise Size 2008-2017
  • Active Enterprises by Sector in 2017 and Change 2015-2017
  • Persons Engaged by Sector in 2017 and Change 2015-2017
  • Employees as a % of Persons Engaged by Sector 2017

Download the ‘Profile of Enterprise in …’ CLARE, DONEGAL, GALWAY, LEITRIM, MAYO, ROSCOMMON and SLIGO

Conclusion

Clearly micro-enterprises play a very significant role in the Western Region’s enterprise base.  There is a higher share of owner-managers working in enterprises in the region which is important to keep in mind when designing and planning business supports. While enterprises in the region were hit very hard during the recession, there has been recovery, accelerating in recent years. There were more enterprises registered in the Western Region in 2017 than a decade earlier.

Enterprises form the backbone of the local and regional economy.  Supporting the establishment and growth of sustainable enterprises across the Western Region is a key priority for the WDC and we hope that this analysis of enterprise data will help to better inform both ourselves and other organisations, individuals and policy makers, about recent trends in the enterprise base  of western counties, including their vital role in job creation.

All documents are available from https://www.wdc.ie/publications/reports-and-papers/

Pauline White

Infographic designed by Resonate Design

 

[1] Data on total enterprises, total persons engaged and enterprises/persons engaged by Sector are based on a figure for ‘total enterprises’ which includes all economic sectors (NACE Rev2) except Agriculture, Forestry & Fishing and Public Administration & Defence.

[2] The geographical breakdown for enterprises is an approximation. The county breakdown is based on the address at which an enterprise is registered for Revenue purposes, rather than where the business actually operates from.  In particular, where an enterprise has local units in several counties (e.g. a supermarket chain), but one head office where all employment is registered, all its employees are counted against the county where the head office is located.

[3] Data on enterprises and persons engaged by enterprise size (micro-enterprises etc.) and data on changes over time are based on a figure for ‘business economy’ enterprises which includes all economic sectors (NACE Rev2) except Agriculture, Forestry & Fishing, Public Administration & Defence, Education, Health & Social Work, Arts/ Entertainment/ Recreation and Other Services.

The Construction Sector in the Western Region

The Western Development Commission (WDC) has published the latest in its ‘Regional Sectoral Profiles’ series which analyses the most recent employment and enterprise data for the Western Region on specific economic sectors and identifies key policy issues.[1]

This report examines the Construction sector which includes the construction of buildings, electrical and plumbing installation, carpentry, painting, civil engineering (infrastructure projects), demolition etc.  It does not however include professional services related to the sector (e.g. architecture, real estate).[2]

Two publications are available:

Employment in Construction

According to Census 2016, 18,166 people worked in Construction in the Western Region. The past two decades have witnessed dramatic jobs volatility in this sector. The number working in Construction in the Western Region increased by 163.6% (from 16,674 to 43,956) in the decade from 1996 to 2006, followed by a 58.7% decline over the next 10 years (2006-2016).

These dramatic changes are clear from Construction’s share of total employment (Fig. 1).  In the Western Region, Construction accounted for 6.7% of total jobs in 1996 and by 2006 its share had almost doubled to 12.6%.  It sector was consistently more important in the region than nationally.

In the Western Region, the crash led to Construction’s share of employment more than halving to 5.4% by 2011; remaining unchanged in 2016. Nationally, the share also declined sharply to 4.8% in 2011 but its role grew somewhat in 2016 (5.1%) indicating that recovery in Construction in the region lagged that occurring elsewhere.

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

 In 2006, Construction accounted for 15% of total employment for residents of county Leitrim, the highest share in the region, with the largely rural counties of Mayo, Galway County, Roscommon and Donegal also having extremely high reliance on Construction jobs at this time.  By 2011, Construction’s share had fallen substantially in all counties.  Despite this, all western counties except Galway City and Sligo were still above the national average in 2011.

Between 2011 and 2016 there was 7.8% jobs growth in Construction in the Western Region, less than half that occurring nationally (16.6%), again indicating how recovery in the building sector in the region lagged that elsewhere.  Within the region Roscommon (11.1%), Galway County (9.5%) and Donegal (9.3%) had the strongest growth, though all still well below the national average.  In contrast to the general trend, Sligo actually saw a decline in the number of residents working in Construction between 2011 and 2016

Employment in Construction in western towns

When considering towns, commuting can be particularly important and it must be remembered that this data refers to residents of the towns, although some may travel to work elsewhere.

Ballaghaderreen (9.8%, 57 people) in Co Roscommon has the highest share of residents working in the sector in the region (Fig. 2) and is second highest among Ireland’s 200 towns and cities (1,500+ population).  Within the region, Carndonagh (9%, 72 people), Ballinasloe (7.1%, 162 people) and Lifford (6.9%, 32 people) have the next highest shares working in the sector.  Small and medium-sized rural towns tend to rely most on Construction.

Six towns in the Western Region are among the bottom ten nationally in terms of the share working in Construction, including the large centres of Galway City, Letterkenny and Sligo.  Greater economic diversity and more alternative job options reduces reliance on Construction.

Source: CSO, Census 2016: Profile 11 – Employment, Occupations and Industry, Table EB030

Self-employment in Construction

Of the 18,166 people working in Construction in the Western Region in 2016, 39.7% (7,206 people) were self-employed (employer or own account worker).  This is the second highest[3] rate of self-employment across all economic sectors due to the nature of Construction sector with many people working in construction trades e.g. electricians, plumbers, being self-employed.

Self-employment is more common in the Western Region (39.7%) than nationally (36.7%) (Fig. 3) with Construction in the region characterised by a higher share of sole traders or micro-enterprises.

The number of self-employed people working in Construction in the region fell by -1.1% between 2011 and 2016. In contrast, nationally, there was strong growth in Construction self-employment (6.2%).  In both areas however the share of total employment that was self-employment declined between 2011 and 2016 (Fig. 3), because employee numbers out-performed self-employment numbers, reducing self-employment’s share of the total.

At 44.2%, Sligo has the highest share of Construction self-employment in the region and had the smallest decline in its share 2011-2016. Clare and Roscommon also have 40+% self-employment with Galway City (33.6%) having the lowest share, the only area in the region below the national average.  This is influenced by the presence of some large Construction firms in the city.

Source: CSO, Census 2016: Profile 11 – Employment, Occupations and Industry, Table EB033. Special run from CSO.

Construction Enterprises and Persons Engaged

In 2017 there were 11,806 Construction enterprises registered in the Western Region with 23,059 persons engaged.[4]  Construction accounted for 20.4% of total enterprises[5] in the region compared with 16.9% in the state (Fig. 4) and was the largest sector in terms of enterprise numbers.  As Construction is characterised by many small scale operations however, it only accounted for 9% of all persons engaged in enterprises in the region (6.7% in state) and was the fifth largest sector.

The rural counties of Roscommon and Mayo is where Construction accounts for its highest share of total enterprises, followed by Donegal and Leitrim where Construction also accounts for over 1 in 5 of all enterprises. This reflects lower business diversity leading to greater reliance on Construction. Sligo and Clare, which had low shares of employment in the sector (see Fig. 1), also have the lowest shares of their enterprises in Construction.

In terms of all persons engaged in enterprises, over 11% were working in Construction in Leitrim, Roscommon and Mayo.  This reinforces the significant role of the Construction sector in both the enterprise and employment profile of these largely rural counties.  Again Sligo has the lowest share in the region (6.7%).

Source: CSO, Business Demography 2017, Table BRA18.

Key Policy Issues

Plays a larger role in the Western Region’s economy, especially in more rural areas: Despite significant decline during the recession and slower recovery than elsewhere, Construction continues to employ a greater share of the workforce and account for a higher share of enterprises in the Western Region.  It is particularly significant for the region’s more rural counties and for small and medium-sized rural towns, in terms of jobs, income and enterprises.  The experience of the last recession highlights the importance of promoting diversity in the rural and regional economy and, while Construction must play a key role, a return to over-reliance on the building industry poses a risk.

Smaller scale operations and high self-employment:  Construction enterprises in the Western Region tend to be smaller and the sector is characterised by high self-employment.  The quality of some Construction self-employment, and its ability to sustain a person’s livelihood, are issues to be considered as the sector grows.  Supports for Construction sole traders and micro-enterprises such as business skills and financial training, as well as information on emerging trends and opportunities must be a focus for policy.

Important employment role among men including young and lower skilled workers: At the height of the Celtic Tiger 22% of working men in the Western Region worked in Construction and the impact of the recession on Construction greatly increased male unemployment and out-migration.[6]  Construction continues to play an important role and in 2016 employed 1 in 10 working men in several of the region’s more rural counties. It also helps to sustain the viability of part-time farms.  In total, 94.2% of the total Construction workforce in the Western Region are men.

While Construction includes many highly skilled and well-paid occupations, it is also an important source of jobs for younger and lower skilled workers.  It is important that current growth in the sector includes opportunities for people of differing skill and experience levels, while not acting as a disincentive to the pursuit of further or higher education.

Opportunities of a low carbon economy: Adaptation to a low carbon economy, specifically improved energy efficiency and renewable energy, presents a growing opportunity for this sector.  Government targets[7] of 500,000 building retrofits and installation of 600,000 heat pumps by 2030 present particular opportunities in the region and its rural areas.

For more detailed analysis, download The Construction Sector in the Western Region: Regional Sectoral Profile and WDC Insights: The Construction Sector in the Western Region here

Pauline White

 

[1] Previous Regional Sectoral Profiles are available here https://www.wdc.ie/publications/reports-and-papers/

[2] See WDC (2019), Professional Services in the Western Region: Regional Sectoral Profile

[3] The highest is Agriculture, Forestry & Fishing at 76.5%.

[4] Data is from CSO, Business Demography 2017

Each enterprise and all persons engaged in that enterprise are assigned to the county where its head office is registered with Revenue.

[5] Total enterprises includes all ‘business economy’ enterprises (NACE Rev 2 B to N(-642)) plus the sectors of Health & Social Work, Education, Arts, Entertainment & Recreation and Other Services.

[6] WDC (2009), Work in the West: The Western Region’s Employment & Unemployment Challenge

[7] Government of Ireland (2019), Climate Action Plan 2019: To Tackle Climate Breakdown

Professional Services in the Western Region

The Western Development Commission (WDC) has just published the latest in its ‘Regional Sectoral Profiles’ series which analyses the most recent employment and enterprise data for the Western Region on specific economic sectors and identifies key policy issues.[1]

This report examines the Professional Services sector which includes two sub-sectors: ‘Professional, Scientific & Technical Activities’ (legal, accountancy, architecture, veterinary, graphic design, translation services etc.) and ‘Real Estate’ (auctioneers, valuers, property letting and management). Both are knowledge intensive services sectors, relatively high value and are highly sensitive to the level of overall economic activity.

Two publications are available:

Employment in Professional Services

According to Census 2016, 14,499 people worked in Professional Services in the Western Region.  Professional Services play a far smaller role in the region’s labour market than nationally (Fig. 1).  In 2016 Professional Services accounted for 4.3% of total employment in the Western Region compared with 6.1% in the state.

As would be expected, Galway City is where this sector is most important in the region (5.2% of its residents work in Professional Services), but this is still well below the state average and is in fact only tenth highest of all counties in Ireland.  Donegal is where it is least important (3.8%) and it has the second lowest share in the state.

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

Between 2011 and 2016 there was 10.8% growth in employment in this sector in the region.  Although growth in the region was only half that occurring nationally (21.1%), the sector still grew considerably more strongly than total jobs over this period in the region (7.5%) as the sector responded to increased economic activity and growing demand.  At 18.2%, Leitrim had the highest growth in the region, followed by Donegal and Sligo showing a strengthening of this sector in the North West.

Professional Services sub-sectors

Within the Professional Services sector, ‘Accountancy & Management Consultancy’ is the largest activity (22% of Professional Services employment) though its share is notably lower in the region than nationally (26.2%) due to the concentration of the head offices of large accountancy firms in Dublin.  The next largest sub-sector is ‘Architectural & Engineering Services’ accounting for 20.1% of all Professional Services jobs in the region (similar to the national share), linked to the construction and manufacturing sectors.

The third largest sub-sector is ‘Advertising, Market Research & Other’[2] and it is considerably more important in the state (20.3%) than the region (17.2%).  As this includes many quite specialised activities mainly serving business/commercial clients there is high concentration in cities and particularly Dublin.

Two sub-sectors where the region has a notably higher share are ‘Testing, Research & Development’ (10.9% v 7.3%) and ‘Veterinary’ (5.4% v 3.3%).  The region’s strength in manufacturing[3] with companies providing testing or R&D services to these factories influences the first, while the region’s rural and agricultural nature influences the second.

Employment in western towns

When considering towns, commuting can be particularly important and it must be remembered that this data refers to residents of the towns, although some may travel to work elsewhere.

Bearna (8.1%, 72 people) has the highest share of residents working in the sector (Fig. 2) and ninth highest among Ireland’s 200 towns and cities (1,500+ population).  Within the region, Strandhill (7.1%, 57 people), Loughrea (6.9%, 159 people) and Buncrana (6.4%, 153 people) have the next highest shares.  In all cases, this is influenced by commuting, with other commuter towns such as Oranmore and Athenry also having quite high shares.

A number of more rural, medium-sized towns such as Castlerea, Boyle, Carndonagh and Ballymote also have relatively high shares and clearly act as service centres for their rural hinterland.

Source: CSO, Census 2016: Profile 11 – Employment, Occupations and Industry, Table EB030

Self-employment in Professional Services

Of the 14,499 people working in Professional Services in the Western Region in 2016, 30.3% (4,399 people) were self-employed (employer or own account worker).  This is among the highest rates of self-employment across all economic sectors which is not surprising given the nature of the sector with many small and micro businesses e.g. solicitors, photographers, vets.

Self-employment is considerably more common in the Western Region (30.3%) than nationally (25.7%) (Fig. 3). More people in the region have chosen self-employment as a route to work in this sector, perhaps due to more limited job options and also the fact that the smaller size of the local market favours smaller operations.

At 32.5%, self-employment is most common in Sligo, followed by Leitrim (32.4%).  This implies these counties tend to have a large number of smaller businesses and fewer larger firms.  Roscommon (27.5%) and Galway City (28.9%) have the lowest shares. In the case of Galway City, the presence of larger firms contributes to a lower share of self-employment.

Source: CSO, Census 2016: Profile 11 – Employment, Occupations and Industry, Table EB033. Special run from CSO.

In the Western Region, the number of self-employed people working in Professional Services grew by 5.7% between 2011 and 2016. This compares with a 1% decline in total self-employment over the same period, indicating that this sector differed from the general trend of declining self-employment in the region.

At a county level, Leitrim had the strongest growth in self-employment in the sector, increasing 20.4% between 2011 and 2016.  This was clearly a very strong driver of the county’s total jobs growth in this sector.  Sligo (11.4%), Donegal (11.4%) and Clare (9.1%) had the next highest growth.  Roscommon had the lowest growth (2.8%) which contributed to its current low share of self-employment.

Professional Services Enterprises

In 2017[4]  there were 8,139 Professional Services enterprises registered in the Western Region. This was 14% of total enterprises[5] (Fig. 4), well below the 17.3% state average.  The sector’s share of total enterprises in the region (14%) is substantially greater than its share of all employment in the region (4.3%, see Fig. 1), though it should be noted that the employment data refers to 2016. Again this illustrates that this sector is characterised by a large number of quite small enterprises.

At 16.2%, Galway[6] has the highest share of its total enterprises in this sector, though still below the national average. Sligo, Mayo and Clare have the next highest shares influenced by the presence of quite large urban centres.  In common with employment, Donegal has the lowest share of its total enterprises in this sector which points to less activity in the sector.

Source: CSO, Business Demography 2017, Table BRA18.

During the period 2012 to 2017 there was 16.8% growth in the number of Professional Services enterprises in the Western Region, the highest increase across all economic sectors.  Growth in the region was higher than the 15.7% increase nationally.

Key Policy Issues

Lower level of activity in Professional Services in Western Region:  Given that this is a knowledge intensive services sector offering high quality employment, increasing the level of Professional Services activity in the region could make an important contribution to diversifying and strengthening the region’s labour market as well as increasing income levels.

Responds strongly to economic cycles and changing domestic demand: While several Professional Services activities can be traded internationally e.g. architectural services, most enterprises in this sector serve clients in the domestic market and often quite locally.  It therefore relies heavily on the level of domestic demand in the economy including from the construction sector.  The fact that economic recovery in the Western Region lagged that occurring elsewhere in the country[7] was an important factor in the region’s lower jobs growth in this sector.

As well as responding to the economic cycle, this sector also helps to facilitate it, as Professional Services play a key role in business growth by providing legal and accountancy services, market research, advertising and so on, to enterprises. The presence of a strong Professional Services sector within the region is therefore a key driver for wider regional economic growth.

Smaller scale operations and high self-employment: Professional Services enterprises in the Western Region tend to be smaller in scale than the national average and it is characterised by high self-employment.  As many Professional Services are outside the remit for direct financial supports from enterprise development agencies, continuation of existing, and the development of new, soft supports for self-employed and micro-enterprises in this sector is important, particularly in smaller urban centres and rural areas where self-employment can be a key pathway to work and this sector is an important source of professional career opportunities.

Large urban locations play a critical role but there are also opportunities for growth beyond these:  More specialised Professional Services tend to be quite concentrated in larger urban locations.  Nationally, there is strong concentration in Dublin and within the region Galway City is a key location. It is important that the locational advantages of Galway City and the region’s other larger centres (e.g. office space, networking opportunities, digital infrastructure) are enhanced to allow them to play a greater national role as centres for Professional Services activity.

There is also potential for further expansion, at a suitable scale, in smaller centres and more rural areas, including through remote work.  Access to high speed broadband is a critical factor in facilitating this sector to such areas.

For more detailed analysis, download Professional Services in the Western Region: Regional Sectoral Profile and WDC Insights: Professional Services in the Western Region here

Pauline White

 

Feature image by Robert-Owen-Wahl from Pixabay

[1] Previous Regional Sectoral Profiles are available here https://www.wdc.ie/publications/reports-and-papers/

[2] The ‘Other’ includes graphic and fashion design, translation, agents/agencies etc.

[3] See WDC (2019) Industry in the Western Region: Regional Sectoral Profile 

[4] Data in this section is from CSO, Business Demography 2017

[5] Total enterprises includes all ‘business economy’ enterprises (NACE Rev 2 B to N(-642)) plus the sectors of Health & Social Work, Education, Arts, Entertainment & Recreation and Other Services.

[6] Business Demography data does not distinguish between Galway City and Galway County.

[7] WDC Insights Blog Post, ‘Recent Trends in Regional GDP’ 14 June 2019

Financial & ICT Services in the Western Region

The WDC has just published the latest in its series of Regional Sectoral Profiles analysing employment and enterprise data for economic sectors in the Western Region.

It examines the Financial & ICT Services sector which covers two sub-sectors: ‘Financial & Insurance Activities’ (banks, mortgage brokers, insurance and pension funding) and ‘Information & Communication’ (publishing, film, video, TV and music, telecommunications, computer programming (software) and IT services/support). Both are knowledge intensive services sectors, relatively high value, high skill and highly paid and tend to be quite concentrated in larger urban centres.

Two publications are available:

Employment in Financial & ICT Services in the Western Region

According to Census 2016, 17,884 people worked in Financial & ICT Services in the Western Region. This was just 9.9% of everyone working in this sector in Ireland, compared with the region’s 16.6% share of overall employment.

Financial & ICT Services plays a significantly smaller role in the region’s labour market than nationally (Fig. 1); 5.4% of total employment compared with 9%.  The balance between ‘Financial & Insurance’ and ‘Information & Communication’ also varies in the region.  Nationally, each accounts for the same share of total jobs (4.5% each) however in the Western Region ‘Information & Communication’ is notably more important than ‘Financial & Insurance’ (3% of all jobs v 2.3% of all jobs). This reflects the concentration of financial services activity in Dublin and particularly around the IFSC.

In the region Financial & ICT Services is most important in Galway City (9.1%), followed by Donegal (6.2%), Clare (5.6%) and Galway County (5.5%) with large urban centres and the Shannon Free Zone influencing the pattern.

Fig. 1: Percentage of total employment in Financial & ICT Services in Western Region and state, 2016

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

 

At a more detailed level, ‘Computer Programming & Consultancy’[1] is the largest employer among Financial & ICT Services activities (36.8% of all employment in the sector) and accounts for a higher share in the region than nationally (32.8%).  In contrast the region has a notably lower share in the next largest activity of ‘Financial Services’[2] (25.1% in the region v 31.3% in the state).  The two other ICT Services activities of ‘Audio-visual, Publishing & Broadcasting’[3] and ‘Telecoms’[4], also account for a greater share in the region, whereas the other financial activity of ‘Insurance, Pension & Fund Management’ accounts for a similar share in both.

Employment in western towns

At 14.3% (1,111 people) of total employment Letterkenny has by far the highest share of residents working in the sector (Fig. 2) and is the eleventh highest of Ireland’s 200 towns and cities (1,500+ population).  Most of the towns with a higher share surround Dublin city. Within the region, Bearna (11%, 98 people) and Oranmore (10.6%, 275 people) have the next highest shares working in Financial & ICT Services, likely due to commuting to Galway City.

Four towns in the Western Region are among the bottom ten nationally (Ballyhaunis, Bundoran, Ballyshannon and Ballymote) at less than 2.6% working in Financial & ICT services. All are rural towns at some distance from larger urban centres.  It is clear there is limited activity in this sector in such towns or commuting to work in other centres.  Remote work offers the possibility for more people working in this sector to live in such locations.

Fig. 2: Percentage of total employment in Financial & ICT Services in towns in the Western Region, 2016

Source: CSO, Census 2016: Profile 11 – Employment, Occupations and Industry, Table EB030

Change in employment in the Western Region and its counties

There was 4.6% jobs growth in Financial & ICT Services in the Western Region between 2011 and 2016 (Table 1). This was less than half the 12.1% increase that occurred nationally and significantly lower than overall jobs growth in the region (7.5%).  Galway City (14.5%) and Donegal (12.9%) experienced jobs growth higher than the national average and this sector exceeded overall jobs growth in both counties.

Mayo, where the sector is least important as an employer, had the largest job losses with a fall of 9.1% in the number working in Financial & ICT Services.  Leitrim (-6.8%) and Sligo (-6.6%) also saw large declines between 2011 and 2016 and in all cases this sector performed worse than jobs overall.  It is important to note that this data is from 2016 and there have been some significant job announcements in this sector since that time, particularly in Sligo.

The performance of the individual activities varied very significantly with a 49.3% increase (2,176 people) in employment in ‘Computer Programming & Consultancy’ in the region contrasting with a 22.8% decrease (1,330 people) in ‘Financial Services’.  Regardless of whether an activity grew or declined, its performance in the region was weaker than nationally, particularly for those activities which declined. The region was closer to the national average for the two growing activities

‘Computer Programming & Consultancy’ showed strong jobs growth across every western county, growing by 60+% in Roscommon, Donegal and Galway City. ‘Financial Services’ saw significant job losses across all western counties, declining by over a quarter in Galway City, Donegal, Sligo and Clare.  One of the main reasons for this was the closure of many bank and building society branches, particularly in smaller towns, growing online banking and increased automation reducing staffing levels.

Agency Assisted Jobs in Financial & ICT Services

In 2017, there were 12,844 agency assisted[5] jobs in Financial & ICT Services based in the Western Region.  Jobs in Financial & ICT Services account for 19.3% of all assisted jobs in the Western Region, but 32.4% of all assisted jobs in the state, consistent with the sector’s lower importance to total employment.

The relative importance of different activities varies (Fig. 3).  The share of total assisted jobs accounted for by ‘Computer Programming’ is essentially the same in both the region and state, indicating that this sector is well developed in the region.  For all other Financial & ICT Services activities, their share of total assisted jobs in the region is considerably lower than nationally. This is particularly the case for ‘Computer Consultancy’ which accounts for 8% of all assisted jobs in the state, making it the largest among these five activities, but less than half this share in the region.  Indeed, for all other activities, their share of assisted jobs in the region is roughly half that nationally.

Fig. 3: Percentage of total assisted jobs in each Financial & ICT Services activity in Western Region and state, 2017

Source: Department of Business, Enterprise & Innovation (2018), Annual Employment Survey 2017, special run

Ownership of Agency Assisted Jobs

Financial & ICT Services has a very high level of foreign ownership with 79% of jobs in foreign owned agency assisted companies, among the highest shares of foreign ownership across all sectors.  The level of foreign ownership has risen, in 2008 71.6% of jobs in the sector were foreign owned.

The balance between Irish and foreign ownership varies across the different sub-sectors (Fig. 4).  All assisted jobs in ‘Computer Facilities Management’ in the region are in foreign owned firms.  The largest activity of ‘Computer Programming’ is strongly foreign dominated with 97.6% of all assisted jobs in this activity in foreign owned firms.  International ‘Financial Services’ is another area of high foreign involvement, with 91.3% of all jobs in the region in foreign owned firms.

‘Computer Consultancy’ has considerably greater Irish owned involvement with only 49% of jobs in foreign owned firms.  In this activity the region has a lower foreign owned share and therefore greater Irish owned involvement.  This activity saw large job losses in the early part of the recession, only recovering somewhat in more recent years. The greater level of Irish ownership within this activity contributed to greater losses of Irish owned Financial & ICT Services jobs during the recession than foreign owned.

Fig. 4: Percentage of total assisted jobs in Financial & ICT Services activities in foreign owned companies in Western Region and state, 2017

Source: Department of Business, Enterprise & Innovation (2018), Annual Employment Survey 2017, special run

 

Key Policy Issues

Low current level of activity in Financial & ICT Services in the Western Region and the gap is widening as the rate of growth in the region significantly lagged that nationally between 2011 and 2016.  Given that this is a high value, high skill and highly paid sector, increasing the level of activity in Financial & ICT Services in the Western Region could make an important contribution to regional economic development, productivity and income levels. However as this is not a highly labour intensive sector it plays a modest role in direct job creation.

Lower level of international activity in the region but internationally trading firms performed better than domestically trading sector, particularly in financial services.  Sustaining and accelerating this growth in internationally trading Financial & ICT Services firms is the main route to increasing the sector’s regional economic impact.  Access to talent, high quality telecommunications, research capacity and a supportive business ecosystem, as well as an attractive quality of life, are critical to this growth.

High level of foreign ownership means there is a need to stimulate the Irish owned sector.   Stimulating start-ups and the scaling of Irish owned technology and finance companies, to a stage where they have the capacity to trade internationally, is important to creating a more sustainable balance in the structure of this sector in the region.  This is particularly important in light of planned changes to international corporation tax rules, developments in the US and Brexit.  Current initiatives such as NUIG’s TechInnovate[6] are trying to address this by facilitating technology start-ups in the region.

There is a growing gender imbalance as the male share of all employment in Financial & ICT Services rose from 50.9% in 2011 to 54.9% by 2016 mainly because of stronger growth in male dominated ICT Services (67.9% male) compared with large job losses in the more female dominated Financial Services (62% female).  Ongoing initiatives to encourage greater participation by women in computer science, technology and finance courses, addressing the perceived male culture within the sector, raising awareness of female role models and female entrepreneurship programmes can all help to redress this imbalance.

Key urban locations play a critical role as centres for Financial & ICT Services activity with Galway City and Letterkenny two key locations particularly in ICT Services, Shannon/Ennis also having notable activity especially in Financial Services and a number of high profile recent announcements for Sligo. The availability of suitable office space, physical and digital infrastructure, links with education and training providers, access to talent and quality of life, as well as addressing issues such as traffic congestion and rising costs, will be important to ensuring these key urban locations can enhance their regional and national role as centres for Financial & ICT Services activity.

Opportunities for growth exist beyond large urban locations, including remote workDevelopments in technology, the world of work and the need to develop more sustainable approaches means that remote work (from home, a co-working hub or other location) holds considerable potential for smaller urban centres and rural areas to host increasing activity in this high skill, high value and highly paid sector. Initiatives such as Grow Remote[7] are currently highlighting the potential for increased remote working and also highlighting key policy changes needed to facilitate its expansion and wider acceptance among employers.  Access to high speed broadband is one of the most critical factors.

Limited self-employment activity in this sector, but higher incidence in the Western Region, particularly for ICT Services in Sligo, Leitrim and Mayo. This implies the structure of the sector in these counties differs from that elsewhere with many sole traders or freelancers engaged in AV production, IT services or software development and fewer large employers. An opportunity exists to target these ICT entrepreneurs, many of whom may be based in quite rural areas and smaller towns, by providing networking opportunities, business support, co-working space and opportunities to collaborate.

Access to talent is critical.  A co-ordinated approach between education and training providers in the region, in collaboration with employers, is needed to ensure an adequate supply of the necessary skills including a strong focus on upskilling and lifelong learning.[8]  Attracting talent to relocate to the region is the complementary approach.  Promoting the quality of life, lower cost of living and shorter commuting times in the region, as well as the job and entrepreneurship opportunities available, are important to attracting people to relocate.  [9]The demand for talent is also increasing the incidence of permanent full time jobs and wages in the sector.[10]

For more detailed analysis see ‘Financial & ICT Services in the Western Region: Regional Sectoral Profile’ https://www.wdc.ie/publications/reports-and-papers/

Pauline White

 

Image by Free Photos at Pixabay

 

[1] Software and app development, IT services, data analysis consultancy etc.

[2] Banks, building societies, credit companies, venture capital, mortgage advisors etc.

[3] Publishing, newspapers, film, photography, music recording, TV production, TV and radio broadcasting etc.

[4] Wired, wireless and satellite telecommunications (phone, broadband).

[5] Department of Business, Enterprise & Innovation (DBEI), Annual Employment Survey 2017. A survey of all firms in Ireland who have ever received support from IDA Ireland, Enterprise Ireland or Udarás na Gaeltachta.

[6] See http://techinnovate.org/

[7] See https://growremote.ie/

[8] See https://www.regionalskills.ie/

[9] See www.LookWest.ie

[10] ‘Information & Communication’ had the highest growth in average weekly earnings nationally over the past five years increasing 21.1% Q1 2014 to Q1 2019. CSO, Earnings, Hours and Employment Costs Survey Q1 2019, Table EHQ03

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

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

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

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

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

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

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

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

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

High and growing self-employment

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

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

Important contribution to town centre renewal

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

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

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

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

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

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

Some of the implications of this are:

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

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

Pauline White

 

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

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

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

Home-Based Working in the Western Region

The Western Development Commission (WDC) has published its latest WDC Insights Home-Based Working in the Western Region,

download here (267 KB):, which is the third in a series examining the current nature of work, focussing on work which is often home based.

Working at or from home can take different forms:

  • The WDC Policy Briefing No.7 e-Working in the Western Region: A Review of the Evidence (download here – PDF 748KB), examined the extent of e-working in the Western Region, examining those in traditional employer-employee relationships, but who work from home, whether full-time or for a period during the working week. This form of working is also illustrated with several case studies of the practice, (download here – PDF 484KB).
  • The second publication in the series, WDC Insights ‘New Work’ – the Gig economy in the Western Region, (download here – PDF 254KB), examined the nature of the gig economy and the extent to which it exists in the Western Region.
  • This WDC Insights on Home-Based Working in the Western Region examines the data on those people who work ‘mainly at or from home’ derived from the Census question ‘how do you usually travel to work?’ with one of the answers being ‘work mainly at or from home’
  • According to the Census, nationally, in 2011[1] excluding those working in the Agriculture, forestry & fishing industries[2], the share of the state’s working population reported as working mainly at or from home was 2.8% (47,127).

In the Western Region the share was higher with 3.2% (8,994) stating they worked mainly at or from home.

There is a higher rate of self-employment in the Western Region and this is likely to be a contributory factor.

  • Those working mainly at or from home represent a broad range of workers; the self-employed, employees, ‘gig’ workers and e-Workers across a broad range of sectors. They may have very little in common except their place of work, which is less visible than traditional work places.

Better data is needed to capture and measure the incidence of all types of work so as to ensure that our policy focus is not limited to the traditional workplace-based employer-employee relationship.

Policies are needed to support all employment types and evidence of the nature and extent of work that occurs in the home is required to inform this.

 

Deirdre Frost

[1]Census of Population 2011, the most recent Census data available. Census 2016 data will be available in September 2017.

[2] The rest of the data presented in this WDC Policy Briefing exclude those working in the Agriculture, forestry & fishing industries, in order to understand the prevalence of e-working in the wider economy. The WDC wish to thank the CSO for a special run of data excluding those working in the Agriculture, forestry & fishing industries.

Census 2016- Understanding Change in the Western Region

The Summary Results (Part 1) of the 2016 Census of Population were released last week (6th April), with information on population, and corrections to the preliminary results, as well as a number of other statistics giving an overall picture of Irish society.  The infographic below, produced by the CSO, provides a picture of the data available.

A CSO report with maps and charts on key statistics is available here  and a presentation on highlights of the data release is available here .

This post discusses some of the information available for the Western Region based on  data provided at county level.  As more detailed Profiles become available we will be able to present more information at Region, County and ED levels.

What is the population of the Western Region and how has it changed since 2011?

Since the release of the Preliminary Results which was discussed here  the population in most Western Region counties has been amended (in most cases it has been increased slightly, although Galway City population has been reduced)[1].  A notable change is that Sligo had, in the preliminary results, a marginal population decrease between 2011 and 2016 but in this corrected data it has actually shown a slight population increase.

The Western Region population was 828,697 people in April 2016.  The population of the region increased by 7,817 people since 2011 (0.95%). In contrast, between 2006 and 2011 there was an increase of 57,516 persons or 7.5% in the population of the Western Region.

The state population in April 2016 was 4,761,865. It increased by 173,613 persons (3.8%) between 2011 and 2016   (Table 1).

Two counties in Ireland, both in the Western Region (Donegal (-1.5%); Mayo (-0.1%)) experienced population decline over the period.  The highest population growth in the Western Region was in Galway City (4.2%) while Galway County also grew (2.4%).  Clare had the next highest population growth (1.4%) while both Leitrim (0.8%) and Roscommon (0.7%) had very small population growth.

Table 1: Population in 2011 and 2016 of western counties, Western Region and rest of state[2]

Source: CSO, Census of Population 2016 Summary Results part 1, EY004: Population and Actual and Percentage Change 2006 to 2016 by Sex, County and City, Census Year and Statistic   

 

Differences in Male and Female Populations

In all counties (and in the Western Region and the State) there was higher growth in the female population than the male population (See Table 2).  In the Western Region there was a 1.6% increase in the female population and 0.3% in the male population.  For the rest of the state the difference was not so pronounced (males 3.6%; females 4%).  Donegal was the only county to experience a decline in its female population.

Table 2:  Percentage Change in County Population 2011-2016 Male and Female

Source: CSO, Census of Population 2016 Summary Results part 1, EY004: Population and Actual and Percentage Change 2006 to 2016 by Sex, County and City, Census Year and Statistic   

 

This difference in the patterns of male and female population growth relates in large part to different patterns of migration and more detailed information will be available on this in Profile 2 (Population Distribution and Movement, release due 11 May) and Profile 7 (Migration and Diversity, release due 21 September).  However, Table 3 below shows the differences in the male and female population in each county (using the standard measure of males per 100 females).  As would be expected, because women live longer, in the oldest age category (75+) there are significantly fewer males than females.  What is more unexpected is that the 30-44 age category has fewer men than women (unlike the age categories above and below it).  This indicates significant male migration in this age category.  Again, as more detail becomes available the different patterns can be better understood.  Galway City consistently has more females than males across the age categories.

Table 3: County breakdown of men per 100 women by age group, 2016

Source: CSO Summary results Census 2016 Part 1, Figure 3.8

 

In this Census 2016 Summary Report the population is not available at ED level.  It is expected that this will be contained in the forthcoming release for Profile 2- Population Distribution and Movements on 11th May.  Similarly, while the Summary Report discusses urban and rural population the detail is not provided at county level.

Population Age and Dependency

Some information is provided about age and the map below shows the difference in average age across Ireland.  The average age in the state is 37.4 but the average age is higher in more rural counties of the West and North West and in Kerry and Tipperary.  In fact Kerry and Mayo have the highest average age (both 40.2) followed closely by Leitrim (39.8), Roscommon (39.7) and Sligo (39.2) while the youngest is in Fingal at 34.3 years.

Source:  CSO Summary results Census 2016 Part 1, Map 3.1

 

It is useful to examine the dependency ratios in the Western Region.  Dependents are defined for statistical purposes as people outside the normal working age of 15-64.  Dependency ratios are used to give a useful indication of the age structure of a population with young (0-14) and old (65+) shown as a percentage of the population of working age (i.e. 15-64).

Nationally, the total dependency ratio was 52.7% while that in the Western Region was, as would be expected, higher at 57.4%.  Leitrim had the highest dependency ratio of any county at 62.6 per cent, closely followed by counties Mayo (61.0%), Roscommon (60.8%) and Donegal (60.5%).  The lowest dependency ratios were in Galway city at 39.0 per cent, followed by Cork city (42.8%), Fingal (50.7%) and Kildare (51.4%).

Looking into the make up of this greater dependency the old age and young dependency ratios are shown in Figure 1.  Galway County has the highest young dependency in the region (36.1%) while Galway City has the lowest in the region (23.4%).  Most counties in the Western Region (except Sligo) have higher young dependencies than the State as a whole (32.3%) in part because of the loss of working age population through migration.  Similarly most Western Region counties also have higher old age dependencies than the state (20.4%) with Galway City once again the exception (15.6%).  The highest old age dependency is in Mayo (28.3%)

Figure 1: Old Age and Young dependency Ratios in the Western Region and State, 2016

Source: CSO, Census of Population 2016 Summary Results part 1, EY004

 

Conclusion

Over the coming months to December 2017 data from Census 2016 will be released under various headings.  This important information gives us the opportunity to better understand our region and its characteristics.  It is essential for policy and decision making, as well as to our understanding the differences among regions in relation to a variety of issues such as economic output, social transfers and the demand for different goods and services.  We look forward to analysing the future releases and to providing a better understanding of the Western Region throughout 2017.

 

Helen McHenry

 

[1] The Preliminary Results are based on the summary sheet for the Census form while this release is based on the information in the complete Census form.

[2] Rest of state refers to all the counties in the state except for the seven counties of the Western Region.

 

Key Issues for the National Planning Framework – Submission from the WDC

The WDC  made its submission on Ireland 2040 – Our Plan: National Planning Framework   yesterday.  The Issues and Choices paper covered a wide range of topics from national planning challenges to sustainability, health, infrastructure and the role of cities and towns.  A key element of the paper considered the future in a “business as usual” scenario in which even greater growth takes place in the Dublin and Mid East region with consequent increased congestion and increasing costs for businesses and society, while other parts of the country continue to have under-utilised potential which is lost to Ireland.  The consultation paper therefore sought to explore the broad questions of alternative opportunities and ways to move away from the “business as usual” scenario.

The WDC submission considers these issues from the perspective of the Western Region, the needs of the Region, the opportunities its development presents for Ireland’s economy and society as a whole and the choices, investments and policy required to achieve regional growth and resilience.

This post highlights the key points made in the submission.  The complete, comprehensive submission on the National Planning Framework by the WDC can be read here (4.5MB PDF).  A shorter summary is available here (0.7MB PDF).

 

What should the NPF achieve?

  • The National Planning Framework (NPF) provides Ireland with an opportunity to more fully realise the potential of all of its regions to contribute to national growth and productivity. All areas of Ireland, the Capital and second tier cities, large, medium and small-sized towns, villages and open countryside, have roles to play both in the national economy and, most importantly, as locations for people to live.
  • While spatial planning strives for ideal settlement or employment patterns and transport infrastructure, in many aspects of life change is relatively slow; demographics may alter gradually over decades and generations and, given the housing boom in the early part of this century, many of our existing housing units will be in use in the very long term. If the NPF is to be effective it must focus on what is needed, given current and historical patterns and the necessity for a more balanced pattern of development.
  • To effectively support national growth it is important that there is not excessive urban concentration “Either over or under [urban] concentration … is very costly in terms of economic efficiency and national growth rates” (Vernon Henderson, 2000[1]). Thus it is essential that, through the NPF, other cities and other regions become the focus of investment and development.

Developing Cities

  • As the NPF is to be a high level Framework, in this submission the WDC does not go into detail by naming places or commenting on specific development projects, as these will be covered by the forthcoming Regional Spatial and Economic Strategies (RSES). The exception to this, however, is in relation to the need for cities to counterbalance Dublin.  In this case we emphasise the role of Galway and the potential for Sligo to be developed as the key growth centre for the North West.
  • The North West is a large rural region and Sligo is the best located large urban centre to support development throughout much of the North West region. With effective linkages to other urban centres throughout the region and improved connectivity, along with support from regional and national stakeholders, Sligo can become a more effective regional driver, supporting a greater share of population, economic and employment growth in Sligo itself and the wider North West region.

Developing Towns

  • While the NPF is to be a high level document and the focus is largely on cities it is important not to assume that development of key cities will constitute regional development. All areas need to be the focus of definite policy, and the NPF should make this clear.
  • While cities may drive regional development, other towns, at a smaller scale, can be equally important to their region. Recognising this is not the same as accepting that all towns need the same level of connection and services.  It is more important to understand that the context of each town differs, in terms of distance and connectivity to other towns and to the cities, the size of the hinterland it serves and its physical area as well as population.  Therefore their infrastructure and service needs differ.
  • Towns play a central role in Ireland’s settlement hierarchy. While much of the emphasis in the NPF Issues and Choices paper is on cities and their role, for a large proportion of Ireland’s population small and medium-sized towns act as their key service centre for education, retail, recreation, primary health and social activities.  Even within the hinterlands of the large cities, people access many of their daily services in smaller centres.  The NPF needs to be clear on the role it sees for towns in effective regional development.

Rural Areas

  • Rural areas provide key resources essential to our economy and society. They are the location of our natural resources and also most of our environmental, biodiversity and landscape assets.  They are places of residence and employment, as well as places of amenity, recreation and refuge.
  • They are already supporting national economic growth, climate action objectives and local communities, albeit at a smaller scale than towns and cities. But a greater focus on developing rural regions would increase the contribution to our economy and society made by rural areas.
  • The key solution to maintaining rural populations is the availability of employment. It is important that the NPF is truly focused on creating opportunities for the people who live in the regions, whether in cities, towns or rural areas.

Employment and Enterprise

  • In the Issues and Choices paper a narrow definition of ‘job’, ‘work’ and ‘employer’ as a full-time permanent employee travelling every day to a specific work location seems to be assumed. This does not recognise either the current reality of ‘work’ or the likely changes to 2040. Self-employment, the ‘gig’ or ‘sharing’ economy, contract work, freelancing, e-Working, multiple income streams, online business are all trends that are redefining the conceptions of work, enterprise and their physical location.
  • If the NPF mainly equates ‘employer’ with a large IT services or high-tech manufacturing company, many of which (though by no means all) are attracted to larger cities, then it will only address the needs of a small proportion of the State’s population and labour force.
  • Similarly the NPF must recognise the need to enable and support the diversification of the Irish economy and enterprise base. It must provide a support framework for indigenous business growth across all regions and particularly in sectors where regions have comparative advantage.

Location Decisions

  • While job opportunities are a critical factor in people’s decision of where to live, they are by no means the only factor. Many other personal and social factors influence this decision such as closeness to family (including for childcare and elder care reasons), affordability, social and lifestyle preferences, connection to place and community.
  • Many people have selected to live in one location but commute to work elsewhere or, in some cases, e-Work for a number of days a week. The NPF needs to recognise the complexity of reasons for people’s location decisions in planning for the development of settlements.

Infrastructure

  • New infrastructure can be transformative (the increase in motorway infrastructure in recent decades shows how some change happens relatively quickly). Therefore it is essential that we carefully consider where we place new investments.  To do so, capital appraisal and evaluation methods determining the costs and benefits of different investment projects need to be re-examined if we are to move from a ‘business as usual’ approach.
  • Investment in infrastructure can strongly influence the location of other infrastructure with a detrimental impact on unserved locations. The North West of the country is at a disadvantage compared to other regions with regard to motorway access. This situation will be compounded if investment in rail is focused on those routes with better road access (motorways) in order for rail to stay competitive, or if communications or electricity networks are developed along existing motorway or rail corridors.
  • The WDC believes that the regional cities can be developed more and have untapped potential, however better intra-regional linkages are needed. The weaker links between the regional centres – notably Cork to Limerick and north of Galway through to Sligo and on to Letterkenny, are likely to be a factor in the relatively slower growth of regional centres in contrast to the motorway network, most of which serves Dublin from the regions.

Climate Change

For the future, the need to move to a low carbon, fossil fuel free economy is essential and needs to be an integral and much more explicit part of the NPF.  The National Mitigation Plan for Climate Change is currently being developed, and it is essential that actions under the NPF will be in line with, and support, the actions in the Mitigation Plan.

How should the NPF be implemented?

  • While much of the role of the NPF is strategic vision and coordination of decision-making, in order for the Framework to be effective it is essential that the achievement of the vision and the actions essential to it are appropriately resourced. The Issues and Choices paper does not give a detailed outline of how the NPF implementation will be resourced, except through the anticipated alignment with the Capital Investment Programme.
  • It should be remembered that policy on services and regional development is not just implemented through capital spending but also though current spending and through policy decisions with spatial implications (such as those relating to the location of services). Therefore it is essential that other spending, investment and policy decisions are in line with the NPF rather than operating counter to it.
  • While the NPF is to provide a high level Framework for development in Ireland to 2040, it seems this Framework is to be implemented at a regional level through the RSES. The Framework and the Strategies are therefore interlinked yet the respective roles of the NPF and the RSES are not explicit and so it is not evident which areas of development will be influenced by the NPF and which by the RSES.
  • In order to ensure that the NPF is implemented effectively it is important that there is a single body with responsibility for its delivery and that there is a designated budget to help achieve its implementation.

 

It is expected that a draft National Planning Framework document will be published for consultation in May.  Following that a final version of the Framework will be prepared for discussion and consideration by Dáil Éireann.

 

As mentioned above the full WDC submission on the Issues and Choices paper Ireland 2040 Our Plan- A National Planning Framework is available here (PDF 4.5MB) and a summary of key point and responses to consultation questions is available here (PDF 0.7MB).

 

 

Helen McHenry

[1] http://www.nber.org/papers/w7503