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Agency Workers – How Many Are There and Where do they Work?

Introduction

There is much discussion about the growth of ‘atypical’ forms of work – such as e-working, remote working, the gig, shared economy and temporary work etc.

The WDC has previously examined various aspects of atypical ways of working, identifying the extent to which it occurs in the Western Region, whether patterns differ to that elsewhere in the country, all aimed at informing labour market policy and identifying recommendations to support better employment opportunities in the Region.

The WDC Policy Briefing (No. 7) e-Working in the Western Region: A Review of the Evidence, examined the extent of e-work (also referred to as teleworking or remote working) in the Western Region, see here. Working at or from home can take different forms and this Policy Briefing examines e-working in traditional employer-employee relationships. The WDC also published case-studies of e-working in the Western Region which highlights a wide range of e-working experiences, see here.

A two page WDC Insights paper examined the gig or shared economy and how broadband and online platforms have enabled new forms of work and income generation to emerge. The paper examines the evidence on the extent to which Gig economy exists in the Western Region, download here.

In the third of the series, the WDC examined working from home. Based on Census of Population data which identifies whether people work ‘mainly at or from home’. The Census definition is self-assigned and can include those who work full-time from home or working from home on at least three days of a five day working week, see here. The WDC have suggested a change to Census 2021, to which the CSO has agreed, which will include a question asking people to list the number of days per week in which they work from home.

Agency Worker Employment

Another aspect of atypical working includes agency worker employment. Sometimes it is suggested that this type of employment is on the rise and is often less secure or more precarious than traditional employment forms.  Agency work, especially that which is temporary, is often considered insecure employment. Is it a phenomenon largely associated with periods of high unemployment and a fragile economy where employers are reluctant to recruit permanent employees or is it a feature of the business model of some companies?

Research conducted for the European Parliament found evidence of an increase in temporary employment as a consequence of the global economic crash a decade ago. The report noted, The financial crisis and its aftermath has been one driver affecting risk of precariousness in Europe. As employers and employees find themselves operating in a more competitive and uncertain context post-crisis, new hirings have increasingly taken place on the basis of temporary and marginal part-time contracts. This rise in atypical contracting has meant that job insecurity has increased significantly in some countries, such as Portugal, Spain, Ireland, Latvia and Greece, involuntary temporary work has increased significantly in Ireland, but also in Latvia and involuntary part-time working has increased significantly in Italy, Lithuania, Spain, Ireland, Latvia and Greece. The link to the full report (5.4MB) is here.

Examining more recent data at a regional level in Ireland, the CSO provide a broad regional breakdown at NUTS 3 level. In this blogpost we review the latest CSO data on agency worker employment examining trends and how the regions compare, see here for full release published in August 2019.

CSO definition

The CSO Labour Force Survey captures the levels of agency workers by asking the following question of all employees in the LFS: Do you have a contract with an employment agency that placed you in your current job and your salary? Yes or No. Responses are therefore based on self-reporting.

Nationally, in Q4 2017, there were 56,200 employees classified as agency workers, and in Q1 2019 the number had decreased to 50,400, a decrease of 5,800.

Examining trends by region, the trends are somewhat different as graph 1 below shows. Both the Northern and Western region and the Eastern and Midland region have a somewhat similar trend, albeit at different levels, unsurprising given the relative size of the numbers employed in each region.

In the Northern and Western Region, (depicted by the black line), the numbers of agency workers at the start of the period was 12,700, there was a decline to 4,300 in Q4 2018 and at the end of the period (Q1 2019) it was 7,500. It should be noted that the LFS is a survey and the results are weighted to conform to population estimates broken down by age, sex and region. Where there are smaller numbers, estimates are considered to have a wider margin of error and so should be treated with caution. In the data above, this wider margin of error has occurred where numbers fall below 7,500.

The Eastern and Midland Region (the orange line), starts with a level of agency workers of 27,000 at the end of 2017. At the end of the period the number of agency workers in the Eastern and Midland region was 22,200.

The Southern region (green line), displays a different trend, starting at 16,500, rising to 20,900 in Q2 2018, dipping at the end of Q4 2018 and then rising again in Q1 2019 to 20,700. It is not clear why the trend in the Southern region is somewhat different and this will be discussed further below.

Regional Share of Agency Workers

Examining agency workers as a share and proportion of all employees, Graph 2 below shows the regional share of employees who are agency workers over the period Q4 2017 to Q1 2019.

At the end of the period, in Q1 2019, the Northern & Western Region accounts for 14.9% of all agency workers in the country, the Southern Region accounts for 41.1% and the Eastern and Midland region accounts for 44%. The respective shares have changed over the last two years, with the Northern and Western Region accounting for a decreased share (22.6% in Q4 2017 to [14.9%] in Q1 2019. The Southern Region has increased its share (from 29.4% in 2017 to 41.1% in Q1 2019.

Proportion of employees who are agency workers

Given the different sizes of each regional labour market it is important to see the extent to which agency workers as a proportion of all employees, varies across time and region. This is illustrated in Graph 3 below.

Nationally (depicted by the blue line), in Q4 2017 agency workers comprised 3% of all employees. This proportion declined to 2.6% at the start of 2019. Both the Northern and Western and Eastern and Midland regions had proportions below the national average.

The Northern and Western region, depicted by the black line, started the period with the highest proportion of employees as agency workers (4.1%), but this has since declined to 1.4% and was recorded at 2.4% in Q1 2019. The Eastern and Midland region trend (depicted by the orange line) is very similar to the national trend albeit at a lower level.

For most of the period, the proportion of employees who are agency workers is the highest in the Southern region (depicted by the green line). At the start of the period under review, Q4 2017, the rate in the Southern region is lower than the national figure – 2.8% and 3.0% respectively. However, from Q1 2018 through to the end of 2019 the proportion of employees that are agency workers is consistently higher in the Southern Region than the national average.

Conclusions

The Southern region comprises the Mid-West (Clare, Limerick & North Tipperary), the South-East (Carlow, Kilkenny, Waterford and Wexford) and the South-West (Cork and Kerry). In the absence of NUTS 3 regional data it is difficult to know whether there may be specific concentrations associated with a concentration in industry sectors that may be more prevalent in the Southern region.

The CSO data does provide other information on the profile of agency worker employment. For example, nationally 52% of agency workers are female. There is a sectoral concentration within the Agriculture, Forestry, Fishing, Industry and Construction sectors where a quarter of all agency employees are employed. There is also a high concentration of agency workers in the Human health and social work activities sector, see here for full release.

Discussions with the CSO indicate it is difficult to ascertain why there is a relatively high share in the Southern region. The CSO point out that the LFS is a survey, the margin of error of the estimates can be greater with smaller cell sizes. More trend data will be needed to see if it is a more established trend and a particularly stronger feature of employment in the Southern Region or if it becomes a stronger feature of employment when economic growth is not as strong.

However, the availability of these data does allow us to monitor trends and helps us build a picture of the range and types of employment, all of which is critical to formulating and improving employment policy.

 

 

Deirdre Frost

Energy efficient homes in the Western Region: some thoughts on retrofit.

The government target of improving home energy efficiency through the retrofitting of 500,000 buildings by 2030 (see the Climate Action Plan 2019) is ambitious.  It is therefore useful to look at the retrofits in more depth, and consider the target and issues from a rural Western Region perspective.

While new buildings have significant potential to incorporate the reduction or elimination of energy consumption (particularly for space heating and cooling purposes) into their design, a focus on existing buildings is essential.  The longevity of buildings and the building stock (typically 50–100 years) means that for a very long time ahead the majority of the building stock will be from before the current era of low energy regulation[1].  In the last blog on this topic  the baseline information on homes in the Western Region was set out.  In this post some of the issues associated with retrofitting these homes is considered in more detail.

Energy efficiency in Western Region homes

As discussed in detail in my previous post, recent improvement in building standards mean that it is generally assumed that homes built after 2010 will require least upgrading and therefore the focus for retrofitting is likely to be on homes built before 2011.  In the Western Region, the Census of population 2016 shows that there are 280,949 homes built before 2011, that is 93% of all the homes in the Western Region (excluding ‘not stated’).  Currently, only 4% of homes in the region, with a BER, have a rating of B2 and higher (the target energy rating in the Climate Action Plan is BER B2 or cost optimal or carbon equivalent).  If these BER ratings already recorded are translated to the Western Region housing stock, it means that 269,711 homes would need to be retrofitted.  The challenge to improve energy efficiency is, therefore, very significant. It is likely, however,  that the BER ratings we have are not reflective of the general housing stock, as they are mainly comprised of houses which are to be sold and new homes and therefore may show higher BER levels than would be the case if all homes had been rated.  On the other hand, some homes have been improved and while some of them will have a new BER rating (included in figures above), others will be better than recorded.

What is retrofit?

Before considering the targets and how they might be applied in the Western Region it is useful to understand what ‘retrofit’ means in an energy efficiency context.  Retrofits are often referred to as ‘shallow’ or ‘deep’.

The SEAI provides the following information on Deep Retrofit:

The Deep retrofit of a home means carrying out multiple energy upgrades all at once to achieve a BER of A-rating.

  • Firstly, you will need to reduce the level of heat loss so that you keep heat in the home for longer. This involves some or all of the following: wall insulation, roof insulation, floor insulation, window upgrades.
  • The next step is to look at an efficient renewable heating system to support the transition away from fossil fuels. The typical heating system installed on a Deep Retrofit Pilot Project is an air-source heat pump.
  • It also includes mechanical ventilation to maintain good indoor air quality.
  • Other renewable energy technologies such as solar water heating panels and solar photovoltaic panels may be appropriate for your home.

In contrast, shallow retrofit may include cavity wall insulation, window replacement, attic insulation, draught proofing, energy efficient lighting and improved heating controls, and these may be done one at a time and not as part of a complete plan.

The government target to bring 500,000 to a BER B2 equivalent does not specify the kind of retrofit required, but it is likely to be closer to a ‘deep’ retrofit approach (although not to an A rating but to a B2), particularly as a proposal is to be developed to phase out grants for ‘shallow’ energy efficiency measures by 2022 (Action 52, Climate Action Plan, Annex of Actions (718KB).

How much will the homeowner save?

Improving the energy efficiency of the home through retrofit should provide energy savings,  the larger the move up the BER scale the larger the savings.  The SEAI has provided an indication of energy costs for different house types at different BER ratings ((see Figure 1 below).

Figure 1: SEAI Indicative annual CO2 emissions and running costs for different rating bands for space and water heating

Source: https://www.seai.ie/publications/Your-Guide-to-Building-Energy-Rating.pdf This table gives estimated annual fuel cost and CO2 emissions on the basis of typical occupancy and heating the entire dwelling to a comfortable level.  The Tables above are based on fuel and electricity factors from February 2014.

According to this table, an owner of an F rated ‘3 Bed Semi Detached House’ could save €2,400 in energy costs a year, while an F rated ‘Large House’ could save €7,200 annually following retrofit.  It should be noted, however, in relation to potential savings, the energy cost estimates usually refer to heating a whole house to ‘a comfortable level’.  It has been found that people living in less efficient homes may not be heating the house to that level, while those in more efficient, upgraded homes may not be achieving the savings estimated as “inhabitants’ everyday practices and norms of comfort are often changed in parallel to retrofitting of the home”.  In other words they may heat their home more (see reference in footnote 1 for more discussion).  Thus the savings are not likely to be as much as predicted.

How much does a deep retrofit it cost?

It is difficult to find generalised cost estimates for deep retrofitting given the significant variation among house types, size and the upgrades required, but it is usually agreed that it is very expensive.

Information from the SEAI pilot deep retrofitting programme found that for 250 homes that completed deep retrofits under SEAI’s pilot programme the average cost to upgrade a home from an average BER rating of F rating to an average A3 rating was €48,417.

Information from Superhomes (a retrofit service providing a ‘one stop shop’ for energy retrofit projects) again highlights the variation in costs depending on the extent of the retrofit.  It notes that the lowest cost for a SuperHomes retrofit in 2019 was €35,000. A grant of €11, 000 was secured, bringing the net cost down to €24,000. This retrofit included a heatpump, wall & attic insulation, external door replacement, airtightness measures and a demand control ventilation system.

SuperHomes suggests that the typical cost of a full scale deep retrofit to BER A3 standard in 2019 was between €50,000 and €70,000 (before grants). These retrofits would include a heatpump, wall and attic insulation, external doors, airtightness measures and a demand control ventilation system. They may also include a mix of external wall insulation, floor insulation, Solar PV and full window replacement. SuperHomes applied for and secured grant funding of a minimum of 35% of costs on all these retrofits. As a result the net spend was typically between €30, 000 and €45,000.

The government retrofit target is a B2 energy rating, rather than the A3 ratings being achieved above.  Thus the cost should be somewhat less, though it is not clear by how much as I have not been able to find data on costs to achieve a B2 rating.  Overall costs of achieving the target will, of course, depend on the type and size of houses which are being retrofitted.  This is turn will partially depend on the incentives available.

However, it should be noted that the cost of the retrofit is very significant, and when compared to the value of homes in Western Region it is clear that it would be equivalent to a large proportion of the home value.  While in more expensive areas the cost of the upgrade may account for less than 10% of the home’s value, it could be double that in counties like Leitrim and Roscommon where house prices are lower (see Figure 2[2]).

Figure 2: Median House price by county 12 months to August 2019

 

Source: CSO residential Property Price index https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexaugust2019/additionalindicators/

There is little data available as yet on the impact of the BER rating on the value of a house though it would be expected to become more important as the carbon tax increases. The level of increase in a home’s value following a retrofit will also become clearer over time.

Conclusion

it is not clear what mechanisms will be used to achieve the government retrofitting target, but it is clear that it is ambitious.  The cost of retrofits, the means of paying for such energy efficiency, the incentives which will be provided have not yet been fixed.

There are a huge range of issues to be considered when deciding how we should best reduce our emissions for the built environment.  My interest is in rural dwellings in particular and this post has explored only a few of the issues relating to retrofit.  I hope to continue this exploration over the coming months so that the ways rural dwellers in the Western Region can participate in our move to a low carbon region can be better understood.

 

 

Helen McHenry

[1] Kirsten Gram-Hanssen, 2014, Retrofitting owner-occupied housing: remember the people.  https://www.tandfonline.com/doi/full/10.1080/09613218.2014.911572

 

[2] While the price of homes sold in the last 12 months in each country is not the same as the average value of homes in the county it gives a useful indication of relative values.

Information Society Statistics – The Regional Picture

The CSO has recently published statistics on household use of the internet, measuring various aspects of the information society. Given the significant importance of the National Broadband Plan, aimed at delivering better internet access for all, especially those in rural areas, it is useful to examine the regional dimension of the Information Society Statistics, see here for the link to the CSO publication.

Household Internet Connectivity

In 2019, 91% of households have an internet connection, an increase of two percentage points since 2018. The regions with the lowest percentage of households with internet access are the Border (84%), the Midlands (85%), the West (89%) and South East (89%).  Some regions, such as the Border, have reported a slight decline in the rate between 2018 and 2019. It is not clear why this is the case, discussions with the CSO suggest it could be due to sampling and the fact that different households are selected each year, see note 1 below.

Type of Broadband Connection

The type of broadband connection also varies by region. Fixed broadband connection is highest in the Dublin region at 92%, compared with the Border and Midland regions, at 71% and 69% respectively. Narrowband connection is most prevalent in the Midlands, see table below.

Frequency of Internet Usage

Across the State the internet is used ‘everyday or almost everyday’ by 79% of individuals. The percentage rises to 85% in the Dublin region and the lowest rates are found in the Border (68%), the South-East (73%) and the West (75%).

Examining infrequency of internet use, nationally 12% of individuals ‘didn’t use it in the last 3 months’ and this rate rises to 19% in the Border region and 16% in the South-West and Mid-East. The CSO notes that frequency of use is related to age and principal economic status so that the younger age categories and students access the internet most frequently while those who are older and retired access it least frequently. The Border and West regions also have a higher age profile, especially in rural areas and this contributes to the higher rates among those who ‘didn’t use it in the last 3 months’ in these regions.

Types of Internet Activities

The CSO asked what type of internet activities were carried out by individuals in 2019. The

most popular activities were ’Finding information on goods and services’ and ‘email’ (sending and receiving emails), both at 84%. The Border region (73% using email) and the Mid-East (76% finding information on goods and services), reported the lowest rates in these types of internet activity.

Examining the use of the internet for financial transactions, nationally 42% of persons bought or renewed existing insurance policies online, see table below. This drops to 27% in the Border region while Dublin has the highest level – 48%, followed by the West at 46%.

e-Government

Examining the extent of e-Government use, that is engaging with public authorities and public services via the internet, in 2019, half of internet users (50%) Obtained information from websites or apps. Regionally, the Border region recorded the lowest rate in obtaining information from websites or apps – just 29% in 2019.

Nationally, 60% reported Submitting completed forms online. It is interesting to note that submitting completed application forms is more prevalent across all regions than obtaining information. The South West, Dublin and the West all had in excess of 60% of individuals submitting completed application forms online which highlights the value of e-Government in engaging with people in this way. While submitting completed forms online is very prevalent, there are some regions such as the Midlands and Border regions where rates were below 50% such as the Midlands – 46% and Border – 47%.

Across all types of contact with public authorities and services as outlined in the Table below, there is some evidence of a decline in rates between 2018 and 2019. It is not clear what is the reason for this, it is possibly due to sampling and different households are selected each year. It could also reflect an actual decline on yearly rates but measuring whether this is a trend or not will only become evident over a longer time period.

Shared Economy

Nationally in 2019 one third of internet users arranged accommodation from another private individual via dedicated website or app (such as a room, apartment, house, holiday cottage, etc.), such as Airbnb, which was an increase of five percentage points on 2018. This again varies by region, but here the West region has the highest incidence with 42% using Airbnb or similar. This is followed by Dublin 37% and the Mid-West by 36%.

The regions with the lowest rates are the South-East (24%) and the Border (26%). All regions reported an increase year on year, apart from the Midlands and the South West which remained stable.

As Table 1.5 shows, the practice of accessing transport services from another private individual online is much less prevalent. Unsurprisingly the rates in Dublin are the highest given the rate of activity there.

Internet Purchases

Considering online purchases, Clothes or sports goods were the most popular online purchase in 2019, purchased by over half (51%) of internet users. Here the regions with the greatest rates of online purchasing is the South west (56%), Mid-East (53%) and Midland region (53%). The lowest rates are in the Border region (41%).

There are clear differences between age groups in the types of goods and services bought online. The largest difference was for Clothes or sports goods, with 68% of individuals aged 16 to 29 years purchasing these, compared with just 23% of those aged 60 to 74. This age difference will also likely impact on regional variations with some regions having and older age profile such as the Border and West.

ICT Skills and Online Learning

Respondents were asked about online learning activities for educational, professional or private purposes which they undertook in the previous three months. Nationally 13% did a course online in the previous quarter and the highest rates were in the West (18%) and the lowest rates were in the Border region – 8%.

There is a greater incidence of people who Used online learning material other than a complete online course, across the State over one fifth (21%) did so in the last three months. Again, there is much regional variation with the highest rates reported in the West (29%), followed by 27% in Dublin. The lowest rates were reported in the Border and the Mid-East (13%).

Nationally, 14% Communicated with instructors or students using educational websites or portals. Here the regional variation is less pronounced.  The Border region reports the same as nationally – 14% while Dublin has the highest rate at 18%.

Home Smart Technology

In 2019, one eighth (12%) of internet users stated that they use home smart technology i.e., they use the internet to interact with household equipment or appliances that are connected to the internet (such as control of heating, control of lights and other building/apartment maintenance systems; household appliances e.g. oven, washing machine, robot vacuum cleaner; security systems e.g. locks, alarms, security cameras).

Regionally there are differences with the highest rates reported in Dublin (19%), followed by the Mid-East, Mid-West and South-West – all 11%. The regions of Midlands and West report 10% of internet users using home smart technology, while the lowest rates reported were in the South-West (9%) and the Border (5%).

Conclusions.

The information Society is very much embedded in how we conduct our lives. As the CSO data shows, the range of uses of the internet is extensive; from shopping for a wide range of goods and services to learning and accessing education services. And this release does not include information on the use of the internet to work from home on a regular or occasional basis.

The overall picture is clear, the use of the internet is pervasive and is becoming more so. The regional picture is less clear. On many of the themes, the Border region lags the national average, along with the West and South-East. On other variables such as arranging accommodation from another private individual online, the West has the highest rates.

Policy implications include the need to rollout the National Broadband Plan as soon as possible so as to ensure households without high speed broadband are not impeded in their use of the internet through a poor-quality service.

Other policy implications include the need to ensure ongoing provisions on high quality ICT skills and training such as the programme operated by the Department of Communications. It is clear that take -up is slower among the older age groups and some of this is due to a need for training.

Finally, it is clear that not everybody accesses goods and services online. Government services in particular need to continue to be delivered on an off-line method for those who are not able to or do not wish to access services online.

 

 

Deirdre Frost

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

Incomes in the Western Region: what do Geographical Income Profiles tell us?

At WDC Insights we are always on the lookout for data sources which can improve our understanding of the economy and society of the Western Region and give us greater insight into how the people living and working here are doing.  The CSO recently published Geographical Profiles of Income in Ireland 2016, a new, very comprehensive report on incomes in Ireland which provides data at both county and Electoral Division (ED) level.  This post provides a taster of the data available.

Background

Geographical Profiles of Income in Ireland 2016, examines income for both households and individuals by county and by ED. Income is also examined across the areas of housing, health, education, occupation and commuting.  The primary definition of income used throughout is Gross Income. This includes income from employment, self-employment, pensions, rental property, social welfare and further education grants.

The production of this data involved the integration of datasets held by Revenue and the Department of Employment Affairs and Social Protection with CSO held datasets to produce aggregated analysis and outputs at a detailed geographical level not previously available. see Background and Methodology for further information[1].

 

Household Median Income for counties

There is significant variation in household income across the county as is shown in the map below with highest incomes tending to be in the East and around the cities.

The median household income in the state was €45,256 in 2016, but there was significant variation from the lowest (Donegal, €32,259) to the highest (Dun Laoghaire Rathdown €66,203) as shown in Figure 1 below.  All of the Western Region counties and Galway city had median incomes below the state average.

Figure 1: Household Median Income for counties, 2016

Source: CSO Geographical Income Profiles, Table 1.1: Household median gross income by county, 2016

Looking more closely at the Western Region (Figure 2), not unexpectedly the highest median income was in Galway City (€44,492), with Galway county (€44,352) close behind.  Clare also had a median household income of more than €40,000.   Surprisingly (especially given other data on county incomes) Roscommon had the next highest median household income (€39,006) , higher than Sligo (€38,695) and Mayo (€37,214).  As noted above Donegal had the lowest median income, with Leitrim significantly above it (although this was still the second lowest in the country).

Figure 2: Household median Income in the Western Region

Source: CSO Geographical Income Profiles, Table 1.1: Household median gross income by county, 2016

Incomes in larger towns

The report also provides data on incomes in towns of more than 10,000 people, of which there are five in the Western Region (Figure 3).  Ennis  (€40,508) had the highest income in the Western Region for these towns (though, as noted above, income in Galway City is higher) while the lowest was in Ballina  (€32,779).  Nationally the lowest income in these towns is in Longford (€29,224)  while the highest is in Malahide (a very substantial €78,631).

Figure 3: Median income in Western Region towns, 2016

Source: CSO Geographical Income Profiles, Table 1.2: Population and household median gross income by town, 2016

 

Incomes at local level

Finally, as mentioned, this data is also available at ED level, providing more information on areas of high income and those which are doing less well (shown on the Map below).  Clearly incomes in many of the EDs in the Western Region and along the Atlantic coast are among the lowest in the country, though there are pockets of affluence in each county.  The detail of income at ED level will be discussed in a future post.

Source: CSO Geographical Income Profiles

 

Conclusion

In previous discussions of measuring regional success it has been noted that limitations in the GVA data need to be counterbalanced by better regional level data on the three key variables of Income, Wealth and Consumption.  This recent publication provides an excellent start in relation to the first of these.  It is really helpful to have such a comprehensive source of data available at both county and ED levels.  The CSO is to be complemented in their work on this.

This new data set has provided much food for thought, with data at county level not always as I would have anticipated (for example, Roscommon having a higher median income than Sligo is unexpected).  Over the coming months I hope to have the opportunity to look into the data in more detail to better understand components income and earnings in our region, counties and at a local level and to consider the patterns which are emerging.

 

 

Helen McHenry

[1] Under the auspices of the Statistics Act 1993[1] and in compliance with all relevant data protection legislation, the CSO is in a unique position to gather and link administrative data sources held by Government Departments and Agencies and evaluate their potential for statistical use.

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

What we do where:  Regions, Sectors and GVA

In this final post on regional Gross Value Added (GVA) data, the focus is on the role of different sectors in our regions.  As discussed in the previous post, the economic contribution of the regions is related to the size of the population and the workforce, but also to the strength of different sectors in each region.  This is examined, followed by a discussion on the importance of each region in national sectoral GVA and finally, although this data has only been available for the last two years, I take a brief look at the changes in Regional GVA for sectors for 2015 and 2016.  As before, there is a main focus is on the Border and West regions as they are the regions most aligned with the WDC’s Western Region[i].

The importance of different sectors in each region

It is useful to examine the importance of different sectors in each region and in Figure 1 the contribution of each sector to the individual region’s GVA is shown.  As noted in the previous blog posts on this topic (here and here), the data for the Mid West and South West regions was supressed by the CSO to preserve the confidentiality of some large Multi National Entities (MNE).  I have, therefore, inferred the data for a combined region (Mid West & South West) so that it can be included here.  Strikingly, in the combined in the combined region of the Mid West & South West the significance of GVA from Industry[ii] is evident (accounting for an extraordinary 64% of the total GVA in this combined region).  This compares to 36% of GVA nationally.  Industry is also particularly important in the Mid East (36% of GVA) and the West (35% of GVA).

The largest sector in the Border region is Pubic administration, heath and education[iii] (26% of GVA) and this is also the largest sector in the Midlands (27% of GVA) as well as being an important sector in the West (20%) and the South East (16%).  Unsurprisingly, the largest sector in GVA terms in Dublin is Information and communication.

Source: CSO, 2019, County Incomes and Regional GDP Table 9d

Looking at other sectors, Agriculture forestry and fishing contributed most to GVA in the Border region (4% of GVA) and accounts for 3% of Midlands GVA.  These figures somewhat underestimate the importance of this sector as the processing element of this sector is included with Industry.  The Agri-food sector therefore makes a greater contribution to the economy than shown here (estimated as 7% of GVA nationally, compared to 1% in this data).  Additionally, economic activity in the agriculture and food sector is derived from a much higher proportion of Irish inputs (74%) than other traded sectors (43%).  See here for discussion.

In 2016 the most important sectors in the economy of the Border region are Public administration, health and education (26%), Industry (20%) and Locally[iv] traded services (14%).  As noted above, Industry accounts for more than a third of the economy of the West (35%), Public administration, health and education accounts for 20% and Locally traded services and Real estate activities both contributed 11%.

The size of GVA from each sector varies significantly (see Figure 2), with Industry the most significant sector (nationally 36% of all GVA), followed by Locally traded services (13%), Public administration, health and education (12%); Professional and administrative services (11%) and Information and communications (9%).

Source: CSO, 2019, County Incomes and Regional GDP Table 9d

 Key sectors in the regions

While it is very useful to look at which sectors are most important to each region,  (as above in Figure 1) but it is also interesting to see which region are most important to different sector’s total GVA (Figure 3 below).  As discussed in the last post on this topic, the regions are very different sizes, in terms of population and persons at work as well as in terms of economic output.  It is important to remember this when looking at contributions from each region (especially Dublin and the combined region of Mid West & South West).

While, as noted above, Industry is very significant in GVA of the combined region Mid West and South West, this is turn translates into this region accounting for a very significant proportion of GVA from Industry (Figure 3) in all regions, close to two thirds of all GVA from Industry in Ireland (62%).  In contrast, Dublin, which is the largest region in terms of population, persons at work and GVA, only accounts for 16% of Industrial GVA (see Figure 3).

Dublin clearly accounts for the highest proportion of GVA in all other sectors (with the exception of Agriculture, forestry and fishing).  It is however, completely dominant in Information and Communication, accounting for 82% of all the GVA of that sector.

Source: CSO, 2019, County Incomes and Regional GDP Table 9d,

As noted, the size of the different sectors should be borne in mind, but it is also interesting to consider relative importance of the different regions (the Border and West in particular) contribution to national GVA in that sector.  Looking at the Border region, Agriculture (14%), Construction (7%), Public administration, health and education (7%) and Real estate activities are the sectors where the Border contributes more than 5% of each Sector’s GVA.

Although manufacturing is important in the West (the high value added medical device sector has a globally significant cluster), the significance of the sector in the Mid West & South West in this  means the West only produces 5% of sectoral GVA, even though this is the largest sector in that region accounting for more than a third of all GVA (Figure 2 above).  The West contributes more than 5% of national GVA in the Agriculture (10%), Construction (10%), Real estate (10%), Public administration (9%) and Arts, entertainment and other services (7%).

Changes over Time

Data on regional sectoral GVA has only been available for the last two years so it is not possible to look back at changes over the longer term.  It is, however, interesting to look at the difference between 2015 and 2016, bearing in mind that the data is very volatile across these two years.

It is difficult to say how much of this volatility relates to the factors underlying the level shift in GVA in 2015 (read more about this here) but it appears to apply in all sectors when looking at growth and decline across regions (Table 1).  Because we can only look at the change between 2015 and 2016, it is important not to place too much significant on the changes but, the significant volatility is evident at a glance.  In the table all declines are highlighted in pink with declines in GVA of more than 20% in bright red.  Growth of more than 10% is shown in pale blue and growth of more than 15% and 25% is shown in darker blues.  Both Construction and Financial and insurance activities grew significantly in all regions, while Industry, Information and communication and Arts, entertainment and other services each grew in some regions while declining in others.

Table 1: Changes in regional sectoral GVA 2015-2016

Source: CSO, 2019, County Incomes and Regional GDP Table 9d, 9e (own calculations)

Looking more closely at the Border and West regions (Figure 4), it is clear that while there was growth in most sectors the growth rates was often different in the two regions, for example in Professional and administrative services GVA in the Border grew by 26% and only by 5% in the West.  In contrast, Arts, entertainment and other services grew by 20% in the West and showed no growth in the Border region.  GVA from Industry fell in both regions (-23% in the West and -7% in the Border region) and while Agriculture, forestry and fishing grew in the Border region (6%) it fell in the West region (-6%).

Source: CSO, 2019, County Incomes and Regional GDP Table 9d, 9e

As noted above, this detailed data on sectoral GVA for the NUTS 3 regions have only recently been calculated.  It was published last year (2018) for the first time in relation to 2015, and this year 2016 data is available.  In future years it will be very useful to be able to examine trends over a longer period in relation to regional sectoral growth.  This will also be important to increasing our understanding of regional productivity issues as well as the different rates of economic growth and development across regions.  This post has been the first opportunity to consider this in more detail, but I look forward to continuing the analysis next year.

 

 

Helen McHenry

[i] Clare is the only Western Region county not in these regions.  Clare is part of the Mid West, for which data has been suppressed.

[ii] Mining and quarrying; manufacturing; electricity, gas, steam and air conditioning supply; water supply; sewerage, waste management and remediation activities.

[iii] Public administration and defence; compulsory social security; education; human health and social work activities

[iv] Wholesale and retail trade; repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities

Size matters: relative changes in regional economies

In the last post on this topic I examined some of the recent trends in regional GDP.  In this post, that analysis is continued, with a focus on the changing share of national Gross Value Added (GVA)[i] coming from each of the NUTS3 regions, regional size and productivity.

As ever, it is important to remember that regional GDP (and associated GVA) is just one measure of regional development and this measure has significant limitations.  It does not provide an indication as to the distribution of wealth between different population groups in the same region, nor does it measure the income ultimately available to private households in a region.  You can read more about this here.  In addition, other issues such as the relocation to Ireland by significant Multi National Enterprises (MNEs) of some or all of their business activities and assets (in particular valuable Intellectual Property) alongside increased contract manufacturing conducted abroad (which is included in Irish accounts), has clearly influenced shares of regional GVA and contributes to the widening disparity.  Despite these difficulties, however, it remains one of the most important regional economic statistics and is a key measure of regional development progress and it is useful to consider the contribution of the regional economies to the national total in more detail.

Unfortunately, as noted in the last post, data for both the South West and the Mid West have been suppressed by the CSO for confidentiality reasons (related to the very significant contribution to GVA by a small number of firms).  In this post these regions are combined into a region “Mid West & South West” for the purposes of discussion (with their combined statistics inferred from the data).  GVA at basic prices is the key statistic discussed here.

Regional Shares of GVA.

The Dublin region (39%) and the Combined Mid West & South West (35%) together account for almost three quarters of the Gross Value Added in the state (see Figure 1) with the Mid East, the next largest region producing 10%.  The Border and Midland regions account for the smallest part of national GVA, at 3% each.

Source: Source: CSO, 2019. Statbank, RAA06 Gross Value Addded by Year, Region and Statistic (2000-2016)

There has of course been very significant growth in GVA in recent years (especially in 2015, as discussed here) and, as much of this occurred in the South West, this has changed the balance of regional GVA with further concentration in the Mid West & South West.

Looking back to 2000 and 2008 the gradual change is evident.  In 2000 Dublin the Mid West and the South West together accounted for 68% of national GVA, in 2008 it was 66% and by 2016 it was 74%.  This is the consequence of very significant growth in the Mid West &South West economies (240%) between 2000 and 2016.  At the same time, GVA in the South East (164%), Dublin (149%) and the Mid East (138%) all more than doubled in size in that period.  Growth in the West (85%), Midlands (82%) and Border (69%) was significantly less.  The proportion of national GVA produced in these regions consequentially declined, although, as discussed in the previous post on this topic, their output did grow, just at a slower rate.

Source: Source: CSO, 2019. Statbank, RAA06 Gross Value Addded by Year, Region and Statistic (2000-2016)

This growth had two phases which can be seen when examining two different periods (2000-2008 and 2008-2016).  During the earlier period (2000-2008) GVA, grew in all of the regions, with the percentage growth highest in South East and Mid-East (Figure 3) and lowest in the Mid-West & South West and the West.  The Celtic tiger was an opportunity for regions to develop rapidly.  Since then (2008-2016) the Mid West & South West and the Dublin region have grown most rapidly.

Source: Source: CSO, 2019. Statbank, RAA06 Gross Value Addded by Year, Region and Statistic (2000-2016) –

The recovery from recession has been slower in the smaller regions, between 2008 and 2016 there was a decline in the size of GVA in the Border region, no growth in the Midlands and only an 8% increase in GVA in the West over the 8 year period.

Looking at the share of regional GVA over time (comparing the years 2000, 2008 and 2016) the consequences of the different growth levels is evident.  We can see (Figure 4) that between 2000 and 2008 the share of GVA from both Dublin and the Mid West & South West combined had reduced and the share from the South East, Mid-East and Midlands increased slightly.  Between 2008 and 2016 the very significant growth in GVA in the Mid West & South West increased the percentage share of the economy in that region to 35% while the share from all other regions consequently declined.

Source: Source: CSO, 2019. Statbank, RAA06 Gross Value Addded by Year, Region and Statistic (2000-2016) –

The West (which is all part of the Western Region) showed a very small decline in its percentage of national GVA (7.1% to 7.0%) while the Border (three of its five counties are in the Western Region) showed a small increase (4.9% to 5.1%) in the period 2000-2008.  Their percentage contribution declined further between 2008 and 2016, with the West accounting for 5% of GVA in 2016 and the Border 3%.

Size of Regions and Regional Economies

The size of the Dublin and the Mid-West & South-West economies is evident when we focus on regional GVA, but for a more balanced picture it is important to look at how these compare to the regional populations and persons at work.  The percentage of the State GVA, Population and Persons at work are shown in Figure 5 below.

Clearly Dublin (39%) and the Mid-West & South-West (35%) account for the highest proportions of GVA, but these regions also have the highest proportion of the population (Dublin 28%; Mid-West & South-West 25%) and the persons at work (Dublin 30%; Mid-West & South-West 27%).  Other regions are significantly smaller.  The Border region accounts for 3% of GVA, 9% of the population and 8% of the persons at work.  The West accounts for 5% of GVA, 10% of the population and 9% of the persons at work.

Source: CSO, 2019. Statbank, RAA06 Gross Value Addded by Year, Region and Statistic (2000-2016) –

There is a clear difference in shares of GVA compared to shares of both population and persons at work (which are quite similar in most region).

It is therefore useful to look more closely at productivity (GVA per person at work).  This is significantly higher in Dublin plus Mid East (these are combined for the purposes of discussion because many of the workers living in the Mid-East are contributing to the GVA of Dublin) and in the Mid West & South West (Figure 6).  GVA per person at work is lowest in the Border, West and Midland regions.  For the Midland region in particular, the commuting effect may be quite strong, workers living in the Midlands are producing GVA in Dublin but counted as persons at work in the Midlands

Source: CSO, 2019. Statbank, RAA06 Gross Value Addded by Year, Region and Statistic (2000-2016) –

The GVA per person at work in the Border and the West are significant lower than that for the state.  As discussed previously, other regions’ GVA has significantly benefited from the relocation to some regions by Multi National Enterprises (MNEs) of some or all of their business activities and assets alongside increased contract manufacturing which all contributed to the very significant growth in GDP and GVA in certain regions (and of course nationally) 2015 (see here for more discussion of this).

Productivity is also influenced by the sectors in each region.  Regions with more high value added enterprises (which are generating a larger margin between the final price of the product and the cost of inputs used to produce it[ii]) will tend to have higher GVA per worker.  The importance of different sector to regional economies is considered in the next post on this topic.

 

 

Helen McHenry

[i] GDP is Gross Domestic Product, GDP and GVA are the same concept i.e. they measure the value of the goods and services (or part thereof) which are produced within a region or country. GDP is valued at market prices and hence includes taxes charged and excludes the value of subsidies provided. GVA at basic prices on the other hand excludes product taxes and includes product subsidies. See background notes .

[ii] See here for more discussion of this issue

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