Posts

Changes and Trends in Disposable Incomes in Western Region Counties

The CSO has recently published data on Household Disposable Incomes at county level as part of the ‘County Incomes and Regional GDP 2016’ release.  This release contains useful trend data on incomes for counties as well as information about the levels of different household income components for each county.  Data on regional GDP, which is also part of this release, will be considered in a future post.

Here I give an overview of the 2016 Disposable Income data (and the estimates for 2017) before considering some of the changes over time.  It should be remembered that the ‘Disposable Incomes’ as discussed in this post are calculated at a macro level and the county data is most useful for comparison among counties and over time.  Indeed the CSO notes that “While the county figures involve uncertainty, they do provide a useful indication of the degree of variability at county level.”

The map from the CSO below gives a quick overview of Household Disposable Income per person in 2016.  It shows, unsurprisingly, that the highest disposable incomes are in the east and south, while counties in the west and north have the  lowest disposable incomes.   Dublin, Limerick and Kildare are the only counties where per capita disposable income exceeded the state average in 2016 although Wicklow, Cork and Waterford, were just below (see Figure 2below for more detail).

 

Source:  CSO, 2019, County Incomes and Regional GDP 2016

A summary of key data for the Western Region is provided in Table 1 below.  The data for 2016 can be regarded as more robust than the 2017 estimates and so it is used for most of the comparisons in this post.  In 2016 Disposable income per person in the Western Region was €17,934 and in 2017 it had increased to €18,128 (I have calculated the Western Region figures using inferred population estimates).

 

Table 1: Disposable income data for Western Region counties

*CSO Estimate  ^Own calculations

Source:  CSO, 2019, County Incomes and Regional GDP 2016  and CSO Statbank Table CIA02

 

Disposable income per person in Donegal is consistently the lowest in the region (and nationally) and estimates for 2017 show a small decline (-0.6%) in incomes in Donegal between the two years.  Disposable Incomes in Donegal in 2016 were only 77% of the state average.  Only three Western Region counties (Sligo, Galway and Leitrim) had disposable incomes of more than 90% of the state average, while Clare had a disposable income of 88% of the state average, Mayo 86% and Roscommon 83%.  The Western Region as a whole had a disposable income per person of 87% of the state average in 2016.

The small changes in disposable incomes between 2016 and the 2017 estimates are shown in Figure 1 below.  As noted, there was a decline in Donegal, and in Leitrim, Mayo and Roscommon the growth was less than 1%.  The most significant growth between 2016 and 2017 was in Clare (2.4%).  For the Western Region as a whole, disposable incomes showed a growth of 1.1%.  Disposable income per person in the State was €20,638 in 2016 and is estimated to have grown by 3.7% to €21,397 in 2017.  As noted, however, the 2017 data is estimated.  All counties showed more significant growth in Disposable Incomes between 2015 and 2016 (Table 1 above).  The largest growth in the region that period was in Mayo (4.6%) and Roscommon (4.4%).

 

Figure 1: Disposable Income per person for Western Region counties and the State, 2016 and 2017 (€)

*CSO Estimate  ^Own calculations

Source:  CSO, 2019, County Incomes and Regional GDP 2016

 

Disposable income per person for all Irish counties is shown in Figure 2 below.  Disposable income per person in Donegal is lowest in the state, and it is third lowest in Roscommon (Offaly is second lowest).  In contrast, Sligo has the tenth highest disposable income per person, and Galway is in eleventh place.  The highest disposable incomes nationally are in Dublin, Limerick and Kildare.   These, along with Wicklow, Cork and Waterford, all have Disposable Income per person of more than €20,000 per annum.

 

Figure 2: Disposable Income per Person for all Counties, Western Region and State.

Source:  CSO, 2019, County Incomes and Regional GDP 2016

 

Trends in Disposable Incomes over time

It is also interesting to look at changes in disposable incomes over time.  Figure 3 shows trends in disposable incomes in the Western Region between 2000 and 2016.  All of the counties show a very similar growth trajectory with rapid growth to the 2008 peak followed by rapid decline.  There was a small peak in 2012 followed by a fall in 2013 which related to a decline in social transfers as discussed here.  This decline between 2012 and 2013 which occurred in all counties, has mostly been followed by a period of growth to 2016.

 

Figure 3: Disposable Income per Person for Western Region Counties 2000-2016 (€)

Source:  CSO, 2019, Statbank Table CIA02

 

Disposable Incomes in the Western Region compared to the State

While Figure 3 shows the actual Disposable Incomes per person, when considering the trends among counties it is helpful to use indices so that county figures can be examined relative to the State (State=100).  Thus Figure 4 provides a contrast to the more positive growth trend indicated above in Figure 3 which showed growth in disposable incomes in Western Region counties between 2013 and 2016.  Growth rates in the Western Region were lower than for the state as a whole and so Figure 4 shows that Disposable Incomes in Western Region counties are declining relative to the state average (although there is some recovery relative to the State indicated between 2015 and 2016).  Figure 4 also reminds us that Galway was the only Western Region to have had a Disposable Income of higher than the state average during this period and this was only for one year in 2010.

 

Figure 4: Index of Disposable Incomes per person in Western Region counties 2000-2016, State=100

Source:  CSO, 2019, Statbank Table CIA02

 

Have Disposable Incomes Recovered?

Given the significance of the peak in Disposable Incomes in 2008 it is interesting to examine how Disposable Incomes performed in 2016 relative to that peak.  Although there has been some recovery in Disposable Income since their lowest point in 2013, Disposable Income per person in 2016 was below that for 2008 in all of the counties in Ireland (Figure 5).   Indeed for seven of the counties Disposable income was over than €4,000 per person less in 2016 than it had been in 2008.  Two of these counties (Roscommon and Clare) are in the Western Region.  As was shown in Table 1 above Disposable Income in 2016 was more than 20% lower in Roscommon (€4,401) in 2016 than it had been in 2008, while in Clare it was more than 19.1% less (€4,277).  Most significantly, in Meath incomes were €5,544 higher in 2008 than in 2016.

 

Figure 5: Difference in Household Disposable Income per person in 2008 and 2016

Source:  CSO, 2019,  Statbank Table CIA02

 

In contrast, Limerick is the county showing least difference in disposable income per person in 2008 compared with 2016 (- €321).  Dublin and Kerry have also recovered relatively well, although there is still a significant difference between Disposable Incomes in these counties in 2016 and 2008.  Of the Western Region counties Sligo has recovered best, with disposable incomes only 8% below that in 2008 (€1,746).  Interestingly, Donegal (14% less) and Mayo (13%), which are among the Western Region counties with the lowest Disposable Incomes per person, also show a less significant gap to 2008 than other Western Region counties.  However, it is of concern that disposable incomes in all counties are still considerably lower than they were in 2008.  While the Irish economy has recovered well in the last few years, this has not fed through to disposable incomes as measured in this data.

The differences in disposable incomes among counties can be explained by the changing patterns in the components of household incomes (as was discussed here and here).  I will examine trends in these in the most recent data on income components in a future post.  The growth and change in the regional economies as shown by the Regional GVA data will also be examined in a future post.

 

Helen McHenry

 

 

Hospitality plays a larger role in employment & enterprise in the Western Region

The WDC has just published its latest Regional Sectoral Profile which examines the region’s fifth largest employment sector – Accommodation & Food Service.  Both the detailed report ‘Accommodation & Food Service Sector in the Western Region: Regional Sectoral Profileand a two-page summaryWDC Insights: Accommodation & Food Service Sector in the Western Region’ can be downloaded here

Accommodation & Food Service includes all those working in hotels, guesthouses, pubs, clubs, restaurants, takeaways, coffee shops, catering companies and mobile food / coffee vans.  Essentially it is the hospitality industry.  The Western Region is home to 19.7% of everyone working in hospitality in Ireland and 23.7% of all of the sector’s enterprises.

Accommodation & Food Service as a share of total employment 

According to Census 2016, 23,038 people were employed in Accommodation & Food Service in the Western Region.  It plays a greater role in the region’s labour market than nationally (Fig. 1) accounting for 6.9% of total employment compared with 5.8%.  Among western counties, it is most important in Galway City at 9.9%, followed by Donegal and Mayo.  These three counties are among the top five in Ireland in terms of the share of their workforce engaged in hospitality.  Roscommon has the lowest share in the region and is fourth lowest in the state.

Fig. 1: Percentage of total employment in Accommodation & Food Service in Western Region and state, 2016

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

At 27.6% of total employment, Clifden has the highest share working in hospitality of Ireland’s 200 towns and cities (1,500+ population) with Bundoran (21.7%), Westport (21.1%), Donegal town (20.3%) and Carrick-on-Shannon (15%) also among the top 10 towns in Ireland.   At under 6%, Ballyhaunis, Ballymote and Boyle have the lowest shares working in the sector in the region.

Employment by gender 

Hospitality is a more important employer for women than men (Fig. 2) with 8.2% of all working women and 5.8% of all working men in the Western Region working in the sector.  The sector plays a more significant role in both female and male employment in the region than nationally, most notably for women.

Galway City, Donegal and Mayo are where hospitality is most important for female employment employing close to 1 in 10 of all women.  In the case of Donegal and Mayo the sector is considerably more important for women’s jobs than men’s.  Galway City is the only area where hospitality is more important to male than female employment however the shares are quite similar indicating the sector is more gender-balanced, as it also seems to be in Sligo.

Fig. 2: Percentage of total male and total female employment that is in Accommodation & Food Service in Western Region and state, 2016

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

Self-employment in Accommodation & Food Service

14.1% (3,237 people) of people working in the sector are self-employed (employer or own account worker). The Western Region has a considerably higher incidence of self-employment than the national average (11.5%).  This could indicate that hospitality operations in the Western Region tend to be smaller in scale with fewer employees and that owner-manager/family-run businesses are more common.  The extent of self-employment declined between 2011 and 2016, most strongly in more rural counties.

Accommodation & Food Service Enterprises

In 2016 there were 4,358 Accommodation & Food Service enterprises registered in the Western Region which was 23.7% of all such enterprises in the state.  This is the sector where the region accounts for its highest share of all enterprises nationally.

Hospitality accounted for 10.2% of all business economy[1] enterprises registered in the Western Region 2016.  Donegal, Leitrim and Mayo have the highest share of enterprises in the sector at 11+% showing the importance of the sector in their overall enterprise profile.

Key Policy Issues for the Western Region’s Hospitality Sector

Accommodation & Food Service plays a larger role than nationally in the Western Region’s economy, in terms of its employment profile and enterprise base.  Any changes in demand for this sector e.g. from Brexit, an economic downturn, will have a particularly large impact on the region and national policy needs to address issues specific to the region such as improved accessibility for visitors and the viability of rural hospitality businesses relying on local demand.

As it is quite widely distributed, hospitality helps to sustain the regional and rural economy and is becoming an increasingly important reason for people to visit town centres. Therefore it is a critical element in town centre renewal efforts.  It is also an important source of jobs for those with lower skills or limited experience, whose rights need to be protected, as well as providing highly skilled occupations and considerable opportunities for entrepreneurship.  Self-employment, while still higher in the region than elsewhere, is declining and it is important to support and encourage self-employment to maintain the diversity of the region’s hospitality offering.

Hospitality is highly sensitive to changing economic conditions which influence both the level of disposable income of local residents and overseas and domestic tourism activity. The balance between local and tourist demand in sustaining the hospitality sector varies considerably across the region (from tourism ‘hotspots’ to small rural towns depending on local custom) and policy aimed at strengthening the sector needs to be tailored to the specific circumstances of different areas.  Rural and border counties are particularly exposed to Brexit while the sector as a whole needs to adapt to emerging trends e.g. Airbnb, changing demographics, low carbon economy.

Download Accommodation & Food Service Sector in the Western Region: Regional Sectoral Profile and WDC Insights: Accommodation & Food Service sector in the Western Region here

The report also examines data on overseas and domestic tourism revenue and numbers to the Western Region, which will be the subject of a future post.

 

Pauline White

[1] Business economy includes all economic sectors except Agriculture, Forestry & Fishing, Public Administration & Defence, Education, Health & Social Work and Other Services.

How important is Industry as a regional employer?

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

Trends in Industry employment in the Western Region and its counties

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

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

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

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

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

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

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

Employment in Industry sub-sectors in the Western Region

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

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

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

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

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

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

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

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

Key Policy Issues

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

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

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

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

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

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

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

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

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

Pauline White

Even Nuttier about NUTS!

Last July I published a blog post Nuts about NUTS! where I discussed the introduction of the new regional classification for statistics in Ireland.  Briefly, a new regional classification for collecting statistics in Ireland was approved by the EU in 2016, following the Local Government Act 2014 and the establishment of three new Regional Assemblies.  The CSO first used this new regional classification in the Labour Force Survey for Quarter 1 2018.  It has since used the new regional classification in any data release which includes regional data.

The new structure involves three NUTS2 level regions (replacing the two previous NUTS2 regions (Southern & Eastern and Border, Midland & West)) and eight (revised) NUTS3 level regions as follows:

  • NUTS2 Northern & Western: Composed of NUTS3 West (Galway, Mayo, Roscommon) and NUTS3 Border (Donegal, Sligo, Leitrim, Cavan, Monaghan).
  • NUTS2 Southern: Composed of NUTS3 Mid-West (Clare, Limerick, Tipperary), NUTS3 South East (Wexford, Waterford, Carlow, Kilkenny) and NUTS3 South West (Cork, Kerry).
  • NUTS2 Eastern & Midland: Composed of NUTS3 Dublin, NUTS3 Mid-East (Wicklow, Kildare, Meath, Louth) and NUTS3 Midlands (Offaly, Laois, Westmeath, Longford).

The changes at NUTS3 level are the transfer of South Tipperary from the South-East NUTS3 region into the Mid-West NUTS3 region (following the amalgamation of North and South Tipperary Councils) and the movement of Louth from the Border NUTS3 region to the Mid-East NUTS3 region.  Therefore four out of the eight NUTS3 regions changed and four (West, South West, Dublin and Midlands) remained the same.  The CSO published an Information Note on the revisions.

Transition Period

Like the UK leaving the EU, we are currently in something of a ‘transition period’ when it comes to regional statistics in Ireland, and while nowhere near as traumatic, it is causing a few problems and some confusion, namely:

Which NUTS3 regions? It is easy to tell the ‘new’ classification when it includes the NUTS2 regions.  If you see Northern & Western, Southern and Eastern & Midland you know it is the ‘new’ one.

However as the names of the NUTS3 regions remained unchanged, when you just see a list of the NUTS3 regions, it is not clear if the ‘old’ or ‘new’ classification is being used. A good example of how this can be confusing was the recent Census of Industrial Production 2016.  In this release data was provided for five NUTS3 regions (Border, Dublin, Mid-East, Midland and West) as the data for the South West, South East and Mid-East were suppressed for confidentiality reasons. No data was therefore given in the release publication for the NUTS2 regions. Reading the release it was not clear which regional classification was used and it was not included in the Background Notes to the release.  Only by going into Statbank to download the data, and seeing the NUTS2 regions of Northern & Western etc. listed was it clear that the ‘new’ classification was used.

When using the CSO’s Statbank system, a ‘Note’ will usually appear in a dialog box at the top of the page (see below), and also at the bottom of the spreadsheet you download indicating if the new regional classification is used.  If you are looking at a published CSO ‘Release’ such as the Adult Education Survey 2017, then the regional classification is usually included in the ‘Background Notes’.

Fig. 1: Screengrab from CSO Statbank

Different CSO data sets: As mentioned above, any new data (which includes a regional breakdown) issued by the CSO since mid-2018 uses the new regional classification.  However data sets published prior to that use the older classification.  So for example the most recent Labour Force Survey data, which measures employment and unemployment, uses the new regional structure but the County Incomes and Regional GDP 2015 data issued last February uses the older classification.  Therefore a report or analysis drawing on a number of different CSO data sets may find that the regional classifications are not necessarily comparable.

Different data sources: While the CSO has adopted the ‘new’ regional classifications for all releases, this may not be true of all data providers.  Earlier this year the IDA issued its end of year results for 2018.  The results included data for the number of jobs in IDA-backed companies by region and the annual change.  The release did not specify which regional classification was used, so it was unclear if their ‘Border’ was the ‘old’ region including Louth or the ‘new’ region without Louth.

I got in touch with IDA and they confirmed they were continuing to use the ‘old’ regional structure as it aligned with their regional office structure, the regional targets set in their Strategy and current EU State Aid regulations.  Their intention is to switch to the new structures from 2020.

While this is very understandable, it does raise the possibility for some confusion and misunderstanding.  For example someone may compare total employment in the Border region in 2018 (derived from the LFS and using the ‘new’ regions) with employment in IDA companies (derived from IDA results and using the ‘old’ regions) without realising the two ‘Borders’ are not the same region.  This clearly illustrates the need for all data providers and users to state which regional classification is being used.

Time series: When releasing new regional data with the ‘new’ classifications, the CSO are (where applicable) issuing ‘backdated’ results for the ‘new’ regions to 2012, so for example in the CSO’s Statbank if you go to the Labour Force Survey, you can download data for the ‘new’ regions for each quarter from Q1 2012 to Q3 2018 (latest).  Clearly, recoding and backdating massive data sets with new classifications is a time-consuming task and providing six years of time series data is very welcome.

However it does mean conducting time series analysis at regional level (except for the four ‘unchanged’ NUTS3 regions) further back than 2012 involves a break in the data at 2012.  This break in the time series can cause some confusion, an example was the Survey on Income and Living Conditions (SILC) published late last year. The CSO used the new classification for the 2017 release and backdated to 2012, with the data prior to that (2004-2011) using the old classification.  They noted this in the dialog box (see below) and download in Statbank and in the ‘Information Note’ for the release.  However, there was some commentary by people comparing the regional poverty data from 2008 and 2017 without making reference to the fact that for four of the eight regions, the data for the two periods was not directly comparable.

Fig. 2: Screengrab from CSO Statbank

Also, while the CSO have committed to providing backdated time series for the new regions to 2012, it is not clear if all data providers will do the same.  Therefore it is important to check.

Coping with the transition!

Obviously over time this issue will largely resolve itself as the revised classification becomes the norm for all data and we move further away from the ‘break’ in the time series.  In the meantime however here are a few suggestions for coping with the transition:

  1. Check: When looking at or downloading any data at regional level, check which regional classification is used. For CSO data, it is usually included in a ‘dialog’ box in Statbank and the Background/Information Note for the release or if the data includes NUTS2 data it is easy to tell. In general any CSO data issued since June 2018 uses the ‘new’ classification and anything issued before that will be the ‘old’.  Also be sure to check if (and how far) any backdating of the data has been done, for CSO it will generally be to 2012. Other data sources would need to be checked on a case by case basis.
  2. Ask: If it is not stated or clear from the release or data, contact the data provider to check. The more people who make a query, the more conscious all data providers will be to clarify which classification is used.
  3. Say: If you are a data provider and publishing data at regional level, be conscious to explicitly state which regional classification is used. If you are a data user and are publishing analysis or commentary using regional data, clarify which classification you are using. This is particularly critical if multiple data sets or sources are used with different regional classifications.

While this may all seem a little pedantic, given the current interest in the impact of Brexit on the border economy, knowing if someone discussing data for the Border is discussing a Border including Louth (with Dundalk and Drogheda) or a Border excluding Louth, could make quite a lot of difference.

Pauline White

The Education Sector in the Western Region

The WDC recently published the third in our ongoing series of ‘Regional Sectoral Profiles’ analysing employment and enterprise data for the Western Region on specific economic sectors and identifying key policy issues. The new report examines the Education Sector, the Western Region’s fourth largest employer.

The full report ‘The Education Sector in the Western Region: Regional Sectoral Profile’ and the two-pageWDC Insights: The Education Sector in the Western Region’, which summarises the key points, can be downloaded here

The Education sector plays a vital role in society, educating our young people, providing lifelong learning and personal development opportunities, as well as the necessary skills for the economy. It includes all those working in public, private or community/voluntary pre-primary, primary and secondary schools (e.g. teachers, support staff) as well as staff of further and higher education institutions and colleges. The sector also includes other types of educational activity such as music schools, adult education and driving schools.  Discussions of the Education sector generally focus on provision of services. This ‘Regional Sectoral Profile’ however focuses on its role as a key economic sector and regional employer.

Employment & Enterprise in the Education Sector

A few of the key findings from the report on employment and enterprise in the sector include:

  • 32,349 people were employed in the Education sector in the Western Region in 2016. Education plays a greater role in the region’s labour market than nationally, accounting for 9.7% of total employment compared with 8.8%.
  • 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 in Co Galway (19%) has the highest share of residents working in Education across Ireland’s 200 towns and cities. The towns with the next largest shares in the region are Bearna (13.3%), Strandhill (12.2%) and Carndonagh (11.9%). It must be noted that this data refers to residents of the towns, although some may travel to work elsewhere e.g. NUI Galway, IT Sligo.
  • The number of people working in Education in the Western Region grew by 4.4% (2011-2016), weaker growth than the sector nationally (5.7%) and also weaker than total employment growth in the region (7.5%).
  • At 32.2% and 25% of total Education employment respectively, ‘Primary’ and ‘Secondary’ are the two largest Education sub-sectors, with a higher share working in both in the region than nationally. In contrast the region has a lower share working in ‘Higher Education’ (15.2% v 16.8%).
  • ‘Pre-primary Education’ saw the strongest jobs growth, +44.8% in the region (2011-2016) largely driven by introduction of the Early Childhood Care and Education (ECCE) Scheme providing a free pre-school place to all children.
  • 7% of all working women and 4.4% of all working men in the Western Region work in Education. The sector plays a more significant role in both female and male employment in the region than nationally.
  • In 2016 there were 2,710 Education enterprises registered in the Western Region. Education enterprises account for 5% of all enterprises in the region, above the 4.4% share nationally.  Sligo is where the sector accounts for the largest share of enterprises (5.5%) with Clare and Galway next highest (5.2%).

Key Policy Issues for the Western Region’s Education Sector

  • Higher reliance on the Education sector in the Western Region: Education is a more significant employer in the Western Region than nationally and plays a critical role in providing professional career opportunities, including in more rural areas where there may be fewer alternatives. While the main focus for Education policy must be the provision of quality services, the sector’s parallel employment role should also be a factor in policy decisions.
  • Central role in female employment: 3 out of 4 people working in the Education sector in the Western Region are women. Galway City has the lowest female share, and Roscommon and Leitrim have the highest, indicating that Higher Education has lower female involvement than other Education sub-sectors. Any future development in Education will have a far greater impact on female than male employment levels.
  • Demographic Factors: The most recent projections from the Department of Education and Skills indicate that primary school enrolments peaked in 2018, while for second level education the numbers are projected to peak in 2024. The expected decline in demand for primary and secondary education in the medium-term will impact on future Education employment trends. Demand for third level education is more varied. As well as direct transfers of young people from secondary school, demand also comes from mature students returning to education and from international students, while staff are also engaged in other activities e.g. research, which are separate to student enrolments.
  • Lifelong Learning: There is increasing recognition of the importance of lifelong learning and the need to continually update skills, or acquire new skills, to adapt to changing technology and an increasingly flexible labour market. As well as the demands of the labour market, lifelong learning is also pursued for personal development. There are regional differences however in participation in lifelong learning. In the Border region, just 5% of adults were engaged in formal education, in the West region it was 8% while it was highest in Dublin at 12%. Meeting the Government’s target of 10% of adults to be engaged in formal lifelong learning by 2020 (15% by 2025), particularly in the Border region, will require a very substantial increase in participation representing a growth opportunity for the Western Region’s Education sector.
  • Regional Skills: The Education sector is largely responsible for providing skills needed by the regional economy; skills needs which are continually changing. Provision of regional skills involves a wide range of education providers and close engagement with employers. Regional Skills Fora provide a useful structure. Changing skill demands impact on Education employment, as emerging skill needs can only be met if Education professionals with expertise in these new areas e.g. artificial intelligence, big data, are available.
  • Emerging Opportunities: The introduction of the ECCE had a very dramatic jobs impact on Pre-primary Education. This shows the potential for developing new opportunities in the Education sector, where job creation may not be the main objective but is nonetheless an important outcome. Brexit presents another potential opportunity. It is estimated that 10,000 students from the Republic of Ireland study in Northern Ireland or elsewhere in the UK and institutions such as Letterkenny IT and IT Sligo in the Western Region, could attract some of these students. Also students from EU member states wishing to study abroad in an English-speaking country are more likely to choose Ireland following Brexit. Another opportunity is the Western Region’s growing number of retired people who represent potential new demand for Education services. Given demographic trends, increased demand for Education services from adults, including retired people, is an area of potential growth.

Download the full report ‘The Education Sector in the Western Region: Regional Sectoral Profile’ and the two-page WDC Insights: The Education Sector in the Western Region’ which summarises the key points, here

Pauline White

A Snapshot of the Western Region – WDC publishes a series of county infographics

The Western Development Commission (WDC) has just published a series of eight infographics showing of key statistics for the Western Region and each of its seven counties.  The data is from the CSO’s Census of Population in 2016 with analysis by the WDC.

 

The infographic shows

  • The population of the county
  • The percentage living in rural areas.
  • The percentage of the working age population is in the labour force
  • Average time to travel to work in minutes

There is a different infographic for each county and there is also one for the Western Region.   The Region’s infographic  shows the Western Region population growth since the last Census in 2011 (1.0%) and the growth over the last ten years (8.7%).

The Region has more females (50.4%) than males and that 15% of the population are over 65 and more than a fifth are under 15 (21.1%).

Infographics are an entertaining way to provide information about the Region and its counties.  They show important county characteristics and information in an accessible and lively way.  We hope they will be used in schools and in workplaces and anywhere that people want to know more about the places where they live or are visiting.

There is a good mix of statistics highlighted on the infographics, showing access to broadband in the Western Region (64%) and also that most of the population consider themselves to be in very good health (57.6%).

The infographics also give information about work and education.  In the Western Region the average time taken to travel to work is 24.8 minutes.  59% of the working age population is in the work force and 39% have a third level qualification.  Two employment sectors are also shown.  Almost 14% of the Region’s workers are in Industry and 6.8% working in agriculture.

You can download the infographics for the Western Region and for the seven counties here:  https://www.wdc.ie/publications/reports-and-papers/

 

Helen McHenry

Understanding Changes in the Components of County Incomes

While my previous post on county incomes (based on the CSO’s publications County Incomes and Regional GDP, 2015) considered the changes in Disposable Income over time, in this post I look at the components of Disposable Income, some of the changes in these since 2000, differences among Western Region counties and their impact on the changes in Disposable Income.  The key component of Disposable Income is Total Household Income (which includes Primary Income and Social Transfers) and this is examined first.

 

Total Household Income is the amount of income from available to the household from earnings, and Rent of Dwellings (imputed) and net Interest and Dividends, as well as ‘Social Benefits and Other Current Transfers’.  Total Household Income grew steadily (Figure 1) in all counties between 2000 and 2008 (in Donegal there was a tiny decline between 2007 and 2008).  In most counties it declined between 2008 and 2011 and then began to grow slowly.  Despite this growth, preliminary figures show that by 2016 neither in the State nor any Western Region county had Total Household Income per person recovered to 2008 levels.  In Roscommon, for example, it was €25,061 per person in 2008 and €21,522 in 2016 (a difference of €3,539) , while in contrast in Sligo it was €24,940 in 2008 and €24,818 in 2016 (a difference of only €122).

 

Figure 1: Total Household Income per person

Source: CSO, 2018, County Incomes and Regional GDP ; Estimates per person based on own calculations using inferred population estimates. 2016 figures are preliminary.

 

Primary Income

Primary Income is the main component of Total Household Income and Figure 2 shows Primary Income as a percentage of Total Household Income over the period 2000-2016.  It should noted that Total Household Income also includes Social Benefits and Other Current Transfers and is balanced by the Statistical Discrepancy (arising from different collection methods being used to estimate income and expenditure).  Therefore that Total Household Income does not equal the sum of Primary Income & Social Transfers.

Nonetheless, it is useful to see how the importance of Primary Income (and by inference social transfers) has been to Total Household Income.  In 2000, in the State as a whole, Primary Income was 87% of Total Household Income.  It was also 87% in Clare but as low as 80% in Donegal but by 2016 it was 81% in the State, 79% in Clare and 70% in Donegal, indicating the increased importance of social transfers.

 

Figure 2: Primary Income as a percentage of Total Household Income

Source: CSO, 2018, County Incomes and Regional GDP

 

What is Primary Income made up of?

Looking at the breakdown of Primary Income (Figure 3) in 2015[1], it is clear that the main component in all counties is wages and salaries (Compensation of Employees (i.e. Wages and Salaries, Benefits in kind, Employers’ social insurance contribution) which nationally makes up 77% of Primary Income.  In the Western Region, Primary Income accounts for 77% in Sligo, 76% in Galway and 75% in Clare.  It accounts for 74% of Primary Income in Donegal, Mayo and Leitrim while in Roscommon it is only 73%.

 

Figure 3: Contributors to Primary Income, 2015

Source: CSO, 2018, County Incomes and Regional GDP

Other elements of Primary Income are accounted for by Net Interest and Dividends (4% in the State and all Western Region counties), and Rent of Dwellings (imputed) which is between 8% and 10% in Western Region counties and 9% in the State.

Income from self employment is the other main component of Primary Income, and this accounts for 14% of Primary Income in Roscommon  and Leitrim, and 11% in Galway and 10% in Sligo and 10% in the State as a while.  Income from self employment is more significant in all Western Region counties than the State as a whole.

Alongside a decline in self employment shown in recent years  there has been a significant decline in the proportion of Primary Income coming from self-employment (Figure 4).  In the State it accounted for 16% of Primary Income in 2000 and was 10% by 2016.  Western Region counties, though starting from a higher base, have followed a similar pattern.  For example in Roscommon income from self-employment was 24% of Primary Income in 2000, but 13% in 2016.  It is not clear why this decline has taken place, perhaps because of a decline in the numbers in farming, or perhaps because of poorer earnings from self-employment.

 

Figure 4: Self employment as percentage of Primary Income

Source: CSO, 2018, County Incomes and Regional GDP

 

Social Benefits over Time

Looking again at Total Household Income, it is interesting to examine the changes in social benefits (Figure 5) over time.   With the growing economy in the early part of the century, the amount received in social benefits per person grew alongside the growth in Primary Income, peaking in most counties in 2009.  After the downturn, however, there was a slow decline in the level of social transfer per person.  This was during a period of significant in some of the social benefits, but high levels of unemployment kept the level of transfers per person quite high.  The decline has continued, to 2016, presumably as the numbers claiming unemployment benefit and assistance has decreased.

 

Figure 5: Social Benefits and Other Current Transfers per person

Source: CSO, 2018, County Incomes and Regional GDP ; Estimates per person based on own calculations using inferred population estimates. 2016 figures are preliminary.

 

Taxation levels over time

Much of the discussion above has related to the components of Total Household Income, but in order to get to a figure for Disposable Income taxation has to be taken into account.

As would have been expected (see Figure 6), in line with growth in incomes between 2000 and 2007 taxes on income (per person) also grew to 2007.  With pay cuts and job losses, there was a sharp decline between 2007 and 2010 but then then taxation on income grew again to 2016.  It is likely that in the first few years this related to increases in tax levied, and then in more recent years the growth has probably come from the increase in the numbers employed and paying tax.

 

Figure 6: Taxation on Income (2000-2016) per person

Source: CSO, 2018, County Incomes and Regional GDP ; Estimates per person based on own calculations using inferred population estimates. 2016 figures are preliminary.

 While I have looked at changes in taxation and social benefits estimated on a per capita basis from 2000 to 2016 it is also interesting to see a direct comparison of the two for each county in 2015. Figure 7 shows social benefits and taxation as a percentage of Total Household Income (as noted above, these percentages should be used to compare the differences amount the Western Region counties, rather than as absolute proportions, as they do not take account of the effect of the statistical discrepancy).  Nonetheless it is useful to compare the different levels of taxation on income and social transfers among the counties.  Higher numbers of people in non-working categories (children, older people and people with disabilities) influences both the amount of tax paid and the level of social transfers received.  For a more detailed discussion of the levelling effects of the redistributive tax and transfer system (as relates to income inequality rather than regional inequality) see this paper from the ESRI.

 

Figure 7: Social Benefits and Taxation as a percentage of Total Household Income 2015

Source: CSO, 2018, County Incomes and Regional GDP; own calculations.

In the State as a whole taxation (24%) is a higher proportion of Total Household Income than Social Benefits (20%), and this is also the case in Galway and Clare.  In the five other Western Region counties social benefits are a higher proportion of Total Household Income than taxation.  This is most evidently the case in Donegal with taxation 18% and social benefits 31% of Total Household Income in the county.

 

Conclusion

Finally, given that this post has examined the various components of disposable incomes Figure 8 gives an overview of the different broad income components in Western Region counties in 2015.  As discussed above, Primary Income is largely made up of earned income (and imputed rent and net interest and dividends), while Total Household Income also includes social benefits.  Taxes are deducted from Total Household Income to give Disposable Income per person.

 

Figure 8: Primary, Total Household and Disposable Incomes for State and Western Region counties in 2015

Source: CSO, 2018, County Incomes and Regional GDP ; Estimates per person based on own calculations using inferred population estimates.

Disposable Income, the key ‘county income’ measure, is made up of different sources of income and transfers and is also affected by taxation, therefore it is valuable to understand the changes in each of these components in the different counties when considering changes to income.

 

 

Helen McHenry

[1] Figures published this year (2018) are for 2015, with provisional figures for 2016.  Therefore when looking at the most recent components of income, 2015 is examined

WDC Insights Publications on County Incomes and Regional GDP

The Western Development Commission (WDC) has just published two WDC Insights: How are we doing? County Incomes in the Western Region and What’s happening in our regional economies?  Growth and Change in Regional GVA.

Both of these examine data from the most recent CSO County Incomes and Regional GDP publication for 2015 (with preliminary data for 2016) and they have a particular emphasis on the counties of the Western Region and on our regional economy.

These two page WDC Insights publications provide succinct analysis and commentary on recently published data and on policy issues for the Western Region.  Both of these WDC Insights are shorter versions of the series of blog posts on County Incomes and Regional GVA which you may have read previously.

How are we doing? County Incomes in the Western Region

In this WDC Insights data on County Incomes in 2015 are examined with a focus on the difference among Western Region counties and changes over time.

Five Western Region counties had Household Disposable Income per Person (Disposable Income) of less than 90% of the state average, while Galway and Sligo were both 93%.  They  had the highest Disposable Incomes in the Western Region in 2015 (Galway (€18,991) and Sligo (€19,001)).

Donegal continues to have a significantly lower Disposable Income than any other county in Ireland (€15,705 in 2015).  Disposable Income in Roscommon was also significantly lower than the state average at €16,582 in 2015. This was the second lowest of any county in Ireland, while Mayo had the fourth lowest.

Regional divergence was at its least in 2010 when all parts of the country were significantly affected by recession. Since then, incomes in some counties have begun to grow faster and divergence has again increased, particularly since 2012.

The WDC Insights How are we doing? County Incomes in the Western Region can be downloaded here  (PDF 260KB)

 

What’s happening in our regional economies?  Growth and Change in Regional GVA

The most recent regional GVA and GDP data (for 2015 and preliminary 2016) published by the CSO is discussed in this WDC Insights with a focus on the regions which include the seven Western Region counties.

Between 2014 and 2015 there was very significant growth in GVA and GDP nationally (a level shift which occurred for a variety of reasons). It is therefore valuable to examine how this rapid economic growth was spread among regions. While data for the largest regions of Dublin and the South West has been suppressed by the CSO, to preserve the confidentiality, variation in growth and disparity in the other regions continues to be of national and regional importance.

The data shows that disparities are widening and economic activity, as measured by GVA, is becoming more and more concentrated.  The smaller contribution to national GVA from other regions highlights their significant untapped potential.

The WDC Insights What’s happening in our regional economies?  Growth and Change in Regional GVA can be downloaded here  (PDF  350 KB)

 

If you find these WDC Insights on County Incomes and Regional GVA interesting and would like to read more detailed discussion of the data please visit these recent WDC Insights blog posts:

Leprechauns in Invisible Regions: Regional GVA (GDP) in 2015

What’s happening in our regional economies? Growth and change in Regional GVA.

How are we doing? County Incomes in the Western Region

I hope that you find these WDC Insights useful.  Let us know what you think.  We’d welcome your feedback.

 

Helen McHenry

What’s happening in our regional economies? Growth and change in Regional GVA.

In the last blog post on this subject, Leprechauns in Invisible Regions, the very significant changes in GVA and GDP[1] at a regional level between 2014 and 2015 were discussed.  These largely applied in manufacturing, with a national growth in GVA that sector of 134%.  As mentioned in that post, some regional data for the NUTS3 regions of Dublin and the South West was suppressed by the CSO to preserve confidentiality.  The focus of this post, therefore, is on changes in other NUTS 3 regions.  Of course Dublin and the South West are the largest economic regions but it is useful to consider the changing situation in regions less affected by the level shift in GVA in 2015 (and not affected by the confidentiality issue), and to examine in more detail the other GVA data published by the CSO in its annual County Incomes and Regional GDP publication.

The change in GVA per person between 2014 and 2015 is shown in Figure 1.  Growth in the State as a whole (which includes the South West and Dublin regions) was most significant (37%), but there was a 30% increase in GVA per person in the Mid West region and a 30% increase in the South East region.  Growth in GVA in those years was more modest in the Midland region (17%) and the West region (9%), while it was only 5% in the Border region.

Figure 1: Regional GVA per person at Basic Prices, 2014 and 2015 

a Data for 2015 for Dublin and South West regions suppressed for reasons of confidentiality

Source: CSO, 2018, County Incomes and Regional GDP, 2015, Table 9c GVA per person at Basic Prices, 2007 to 2016

Looking at changes over a longer period Figure 2 shows GVA per person in the NUTS 3 regions since 2007[2].  GVA per person was significantly higher in the Dublin and South West regions between 2007 and 2014.  There has been some change in relativities among regions since 2007 with the Midland region, which had lowest GVA per person in 2007, higher than the Border region in 2015 (22,320 in the Midland region compared to 19,060 per person in the Border region in 2015).  GVA in the West grew more rapidly than elsewhere in 2011 and 2012 but since that period GVA in the West has again fallen behind that in the Mid East[3] and the South East and the gap between them has widened.

Figure 2: Regional GVA per person at Basic Prices, 2007 and 2016 

a Data for 2015 and 2016 for Dublin and South West regions suppressed for reasons of confidentiality

b Preliminary results for 2016

Source: CSO, 2018, County Incomes and Regional GDP, 2015, Table 9c GVA per person at Basic Prices, 2007 to 2016

As has been discussed, some of the regions showed very significant growth between 2014 and 2015 but, as can be seen in Figure 2, there was no significant increase in GVA between 2015 and 2016 in any region for which data is available.

Disparities within the State

An index of how GVA in the regions compared to that in the State between 2007 and 2016 (Figure 3) gives a useful picture of widening regional disparity.  None of the regions for which data is available were above the State average during that period.  The Border region had an index of only 36.3 in 2015.  In that year the Midland region was only 42.5% of the State while the West was 56.0.  In contrast in 2007 the Border index was 68.1, the Midland index was 65.5, and the West was 71.3.  The Mid West, which had consistently highest index of GVA for regions where data was available, was 72.6% of the State average in 2016.

Figure 3: Index of GVA for NUTS 3 Regions, 2007-2016, State=100

a Data for 2015 and 2016 for Dublin and South West regions suppressed for reasons of confidentiality

b Preliminary results for 2016

Source: CSO, 2018, County Incomes and Regional GDP, 2015, Table 10 Indices of GVA per person at Basic Prices, 2007 to 2016 (State = 100)

All of the regions for which data is available have lower indices of GVA relative to the State in 2016 compared to 2007.  For example, the West was 71.3 in 2007 and 56.0 in 2016, and the Border was 68.1 in 2007 and 37.1 in 2016.  This indicates the very significant widening of disparities in GVA between these regions and GVA in the State which is influenced by the more rapidly growing Dublin and South West regions.

 

EU comparison

It is also interesting to look at changes in GVA over time relative to an index of regional GVA in the EU.  This shows how Irish regions are faring compared to the rest of the EU.  It is also important as the relative size of regional GVA per person impacts on the level and type of EU structure funding available to a region.  Regions where GDP per capita is less than 75% of the EU average are designated ‘convergence regions’ (86 regions between 2014 and 2020) and those with GDP per capita above 75% of the EU average are seen as developed regions (186 NUTS 2 regions).

Looking at the NUTS 2 regions in Ireland the changes relative to the EU average are very stark, particularly since 2015 (Figure 4).  In 2007 the S&E region was 163.8% of the EU average and it declined to 144.2% in 2009, there followed by steady grown to 2014, when it reached 153.2%, still below that in 2007.  The level shift in GVA in 2015 meant the S&E region increased dramatically to 213% of the EU average in 2015.  In contrast in 2007 GVA in the BMW region was at the EU average (100.9) but it declined relative to the EU average until 2014 (77.1%) with only slow growth for 2015 and 2016 (it is estimated at 80.1% of the EU average in 2016), compared to 213% in the S&E region.

Figure 4: Index of GVA for BMW and S&E regions (NUTS 2), 2007-2016, EU28=100

b Preliminary results for 2016

Source: CSO, 2018, County Incomes and Regional GDP, 2015, Table 11   Indices of GVA per person at Basic Prices, 2007 to 2016 (EU28 = 100)

There is more fluctuation in GVA relative to the EU28 when we look at NUTS 3 regions (Figure 5).  Even without data for the regions with the highest GVA (Dublin and the South West) the other regions in the S&E NUTS 2 region have all had higher GVA than the EU average since 2014.  The Mid West region consistently had GVA higher than the EU average since 2007, despite some decline, while the South East and the Mid East were below the EU average between 2009 and 2014).

Figure 5: Index of GVA for NUTS 3 regions, 2007-2016, EU28=100

b Preliminary results for 2016

Source: CSO, 2018, County Incomes and Regional GDP, 2015, Table 11   Indices of GVA per person at Basic Prices, 2007 to 2016 (EU28 = 100)

 

In contrast, the three regions which make up the BMW were all at or below the EU average in 2015 and 2016, and the Border and Midland regions have never been above the EU 28 average.  The Border is currently only 65.7% of the EU average (2016) while the Midlands is 76.2%.  GVA in the West region has shown significant fluctuation, and was particularly strong in 2011 and 2012 (peaking at 108.8% of the EU average) but has since fallen back, though it is currently very close to the EU average (99.2%).

 

Productivity

It is also interesting to look at changes in productivity in recent years (Figure 6).  There was a dramatic increase of 42% in productivity (GVA per person at work) in the State between 2014 and 2016 (this includes the figures for the South West and Dublin regions), and there were also significant increases in the Mid East (38%), Mid West (34%) and South East (40%) regions.  While increases in productivity were much smaller in the Border (9%), Midland (20%) and West (15%) all regions did show productivity growth.

Figure 6: GVA per person at work 2014-2016 (NUTS 3)

Source: CSO, 2018, County Incomes and Regional GDP, 2015,Table 13  GVA at Basic Prices, population and persons at work for each region 2015

 

Regional Productivity is dependent on a number of factors, including the types of economic activities being undertaken in the regions so it is useful to look more closely at the data for this.

Economic Sectors

There is significant variation in the importance of different sectors in each region (Figure 7).  Looking at Industry, for example, the West region has the highest proportion of GVA from this sector (of the regions for which data is available) at 41.5% compared to 38.8% for the State as a whole.  There is substantial variation in the contribution of Professional, Scientific and Technical services to GVA (13.6% in the Mid East region and 13.4% in the South East compared to 5.3% in the Midland region and 6.2% in West region).  Public Administration and Defence makes a very significant contribution to GVA in the Border (27.9%) and Midland region (26.8%) but only accounts for 11.9% of GVA in the State as a whole.

Figure 7: Gross Value Added by Sector 2015

Source: Source: CSO, 2018, County Incomes and Regional GDP, 2015,Table 9d   Gross Value Added by Sector 2015

 

The relative importance of the three main branches of economic activity in the Border, Midland and West Regions is shown in Figure 8.  Manufacturing, Building and Construction accounts for almost half (46%) of GVA in the West region but only 24% in the Border and 32% in the Midland regions.  In contrast services account for 65% of the Midland GVA, and 73% of GVA in the Border region and 52% in the West region.  For the State as a whole Manufacturing, Building and Construction accounts for 41% of GVA and Services account for 58%.

Figure 8: GVA in Border Midland and West regions by branch, 2015

Source: Source: CSO, 2018, County Incomes and Regional GDP, 2015, Table 15   GVA at Basic Prices classified by region and branch, 2014 and 2015

 

Looking at changes in GVA between 2014 and 2015 for each branch of the economy and, as would have been expected, there were significant changes in GVA from Manufacturing, Building and Construction in most regions between 2014 and 2015, with a 105% increase in the State, a 76 % increase in the South East, and a 75 % increase in the Mid West.  In the West, however the increase in GVA in this branch was only 20% and again, very significantly (and giving rise to the low growth in GVA) in the Border it was only 3%.

Figure 9: Changes in regional GVA by branch between 2014 and 2015

 

Source: Source: CSO, 2018, County Incomes and Regional GDP, 2015, Table 15   GVA at Basic Prices classified by region and branch, 2014 and 2015

 

There were also changes of note in the Agriculture, Forestry and Fishing sector (which accounts for a relatively small amount of GVA).  There was a decrease in GVA from this sector of 7% in the State between 2014 and 2015 and a significant decrease of more than 20% in the South West and 14% in the Border region and the Mid West region.  GVA from services grew in all regions, but only by 1% in the West region (compared to 11% in the State).

 

Conclusion

While there are difficulties with using GVA and GDP as measures of regional development (see here and here) it is nonetheless a very important indicator of regional economic activity and essential to our understanding of the changes taking place in Irish regions.    However, in order to understand regional growth and change it is important to use GVA in combination with other data such as that on employment, enterprise activity, income, wealth and consumption.

 

 

Helen McHenry

 

[1] 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 .

[2] Data for the South West and Dublin Regions is not available for 2015 and 2016

[3] In previous posts on GVA the Mid East has been considered with Dublin (see this post for example) as much of the GVA in the Dublin region is produced by commuters from the Mid East (and other regions) and GVA per person for the Dublin region does not reflect this.  However, as data for the Dublin region is not available Mid East data is included here.

Leprechauns in Invisible Regions: Regional GVA (GDP) in 2015

Regional GVA (GDP)[1] figures for 2015, and preliminary figures for 2016, were published recently by the CSO.  The 2015 figures are of particular interest as that year (the year of leprechaun economics), there was a level shift in the size of the economy.  The relocation to Ireland by significant Multi National Enterprises (MNEs) of some or all of their business activities and assets (in particular valuable Intellectual Property) alongside increased contract manufacturing conducted abroad (which is included in Irish accounts), all contributed to the very significant growth in GDP.

There has been much discussion of the issue (see here, here and here) and a review of the statistics used to produce the data.  In addition the CSO recently held a seminar on the impact of globalisation on Ireland’s accounts, with papers available here).  The significant change in GDP in 2015 (a 26% rise on 2014) is, of course, played out at a regional levels and is evident in the regional GVA data.  However, because of the significant impact of a few businesses in some figures, for reason of confidentiality the CSO has not published GVA data at regional level for Dublin or for the South West (the ‘invisible’ regions of the title).

This is, of course, very problematic for those seeking to understand the economies of these regions and for those of us interested in comparing regional economic activity.  For regions, measures of progress and disparity and measures of how well they are doing, whether they are catching up or falling behind are all key issues considered using GVA data.  Nationally, other indicators (including GNI*, Modified Domestic Demand and a Modified Current account (CA*)) have been developed to help improve our understanding of growth and change in the domestic economy.  It is to be hoped that consideration will be given to producing other regional economic indicators (such as a regional GNI*) which could add to our understanding of changing regional economies.

This post focuses on the level shift in GVA which occurred in 2015 and its impact in regional statistics, while my next post will examine other (more traditional) aspects of regional GVA in more detail.  In this post Dublin, and the South West are considered together.

The size of the Regional Economies

Much of the dramatic increase in GVA was concentrated in Dublin and the South West (although, as discussed below, it was not confined to these regions), so it is useful to look at how much these regions contributed to Irish GVA in 2015 (See Figure 1).  The two regions of Dublin and the South West together accounted for more than two thirds (67%) of Irish GVA, although, interestingly this was not a dramatic increase on 2014 when the two regions contributed 63% of GVA.  This is partly because most regions experienced level shifts in their GVA between the two years.

Figure 1:  Regional contribution to Ireland’s GVA in 2015

*Dublin and South West are not a ‘region’ but are shown together as data not available for these two regions (own calculation from data).

Source: CSO, 2018, County Incomes and Regional Accounts Table 9   GVA per Region at Current Market Prices (GDP), 2007 to 2016 

Output from these regions over time

It is also useful to look at the changing contribution of the two regions with the largest economies over a longer time period (Figure 2).  In 2000, Dublin and the South West contributed 57% of national GVA.  This has been rising, particularly since 2010, and it reached 67% in 2015 (and remains 67% in the 2016 estimate).  This indicates the very significant concentration of high value added activity in these two regions, a concentration which has been increasing over time.

Figure 2: Percentage of National GVA from Regions 2000-2015

Source: CSO, 2018, County Incomes and Regional Accounts table RAA01

Of course, before 2015, these two regions could be considered separately, and in 2014 Dublin contributed 45% of national GVA while the South West contributed 18%.  In 2002 the South West accounted for 20% of GVA and Dublin 37% (figures for the South West generally varied between 18 and 20% of national GVA over this period).

GVA per person in Regions

While the above discussion has focused on the amount of GVA contributed by the regions it is, in general, more useful to consider GVA per person as a means of comparing regions (because of different regional sizes).  Given the lack of data for two of the NUTS 3 regions, it is easiest to look at (Figure 3) NUTS 2 level regions i.e. the Border, Midland and West (BMW) region and the Southern and Eastern (S&E) region (which includes both Dublin and the South West).  GVA per person has always been significantly higher in the S&E region than in the BMW.  In 2000 it was €28,490 in the S&E and €19,148 in the BMW, a difference of €9,342 per person.  The figures followed a similar pattern (with some minor variation in the disparity) over the year to 2012 when the trends began to diverge, most dramatically in 2015.  In that year GVA per person in the S&E was €63,179 (up from €44,464 per person in 2014), and was only €23,606 in the BMW.  This is a very significant difference of €39,573 in GVA per person.

Figure 3: Gross Value Added (GVA) per person at Basic Prices (Euro) by NUTS2 Region and Year (2000 to 2015)

Source: CSO, 2018, County Incomes and Regional Accounts table RAA01

 

While the difference in GVA is dramatic, it should be remembered that, in relation to household income, which is what is relevant to most people, differences in income from economic activities are, to some extent, smoothed out by taxation and social transfers (see here for discussion of 2015 Household incomes at regional level).  However, the very different output levels among regions are significant and deserve attention.  If high value added activity remains concentrated in a few regions, disparities will continue to widen and there will be an ongoing perception that some regions are ‘dependent’ on others for transfers.  Indeed, without growth in higher value added activity and better quality employment this would become inevitable.  A focus on growing weaker regional economies and increasing higher value added activities (and not just from MNEs) is essential to growing our national economy.

Which regions are most affected by the 2015 level shift?

Although the data for Dublin and the South West has been supressed for reasons of confidentiality, it is clear that these regions experienced a level shift in their GVA between 2014 and 2015 (see Figure 4 below).  But most other regions also experienced a significant increase, or level shift.

It should be noted that, in this post, we are looking at GVA rather than GDP (see footnote 1)[2].  While there was a startling 26% increase in GDP in Ireland in 2015 (published in July 2016), the increase GVA for the State was even bigger in 2015 (37%).  See here for more information on this and on the MNE components of GVA.

As expected, the largest increase (46%) in GVA was in Dublin and the South West (again, these are combined as data for these regions was not published[3]).  But the other regions in the S&E also experienced a significant increase, with the Mid East, Mid West and South East all showing increases in GVA of more than 30%.

Figure 4: Increase in GVA in NUTS 3 regions between 2014 and 2015

Source: CSO, 2018, County Incomes and Regional Accounts Table 9b   GVA per Region at Basic Prices

 

In contrast, the three regions which together make up the NUTS2 BMW region had much smaller increases in GVA.  Between 2014 and 2015 GVA in the Midland region increased by 17%, in the West by 10% and in the Border region by only 6%.  The impacts of globalisation on GVA statistics are significantly less in the BMW region, which is much less dependent on the globalised sectors (though consequently they also have much lower economic output).

Preliminary data for 2016 shows a return to more normal GVA growth rates between 4% (Mid East and West) and 7% in the Border region.  The ‘Dublin and South West group’ shows a modest 5% increase in GVA.

Manufacturing and other sectors affected

Manufacturing is key sector experiencing the level shift in GVA between 2014 and 2015.   Looking at the manufacturing sector in the NUTS 3 regions (Figure 5 below), it is clear that most regions experienced a level shift in GVA from Manufacturing.  Only the Border region showed no discernible change, with a growth of only 5% in Manufacturing GVA.  The West also had a more modest (though still significant) growth in GVA of 25% from Manufacturing in 2014-2015.  With two NUTS regions (Mid West and South East) showing growth in GVA from manufacturing of more than 100% and Dublin and the South West combined showing a 172% increase in GVA from Manufacturing, this is clearly the sector where most of the significant changes between 2014 and 2015 took place.

Figure 5: Increase in GVA in the Manufacturing Sector in NUTS 3 regions between 2014 and 2015

Source: CSO, 2018, County Incomes and Regional Accounts Table 9d and e GVA by sector

 

However, in a number of other sectors different regions showed quite significant changes.  As would be expected these are in the high value sectors with global value chains.  There were significant increases in ‘Professional, Scientific and Technical Activities etc.’ in the Border (43%), the Mid East (50%) and South East (48%), while the Border also showed a 31% increase in GVA from Financial and Insurance Activities in 2014-2015.  Finally, the South East experienced a 39% increase in GVA from Information and Communication.  Not all of these increases are necessarily related to the relocation of IP assets, or to the other factors which underlie the level shift in GVA between 2014 and 2015 but these are all very significant growth figures (the detail of other sector changes in GVA will be discussed in a forthcoming post.)

Manufacturing is the sector where data is suppressed for reason of confidentiality in Dublin and the South West.   It is a key sector in these regions.  In 2014 (the first year for which such regional data was available) the South West accounted for 34% of Ireland’s Manufacturing GVA and Dublin accounted for 29% (63% in total). In 2015, as shown in Fig. 6, the two combined accounted for 73% of Ireland’s GVA from Manufacturing.

Figure 6: Regional contribution to Manufacturing GVA in 2015

Source: CSO, 2018, County Incomes and Regional Accounts Table 9d GVA by sector

 

The dominance of these two regions in the high value manufacturing sector is evident when the contribution of different sectors to regional GVA is considered at NUTS 2 level (Figures 7 and 8 below).  In the Southern and Eastern region manufacturing accounted for 38% of the Region’s GVA, and other high value areas (‘Information and Communications’ (10%), ‘Financial and Insurance Activities’ (7%) and ‘Professional, Scientific and Technical Activities’ (11%) also relatively important (28% of GVA in the S&E came from these three sectors combined).

Figure 7: Gross Value Added by Sector in the Southern and Eastern Region

Source: CSO, 2018, County Incomes and Regional Accounts Table 9d GVA by sector

 

In the Border, Midland and Western region the Manufacturing sector contributed 28% of GVA and the other high value sectors were much less significant in GVA terms.  ‘Information and Communications’ (2%), ‘Financial and Insurance Activities’ (5%) and ‘Professional, Scientific and Technical Activities’ (6%) combined only accounted for 13% of GVA in the BMW region.  In contrast ‘Public Administration and Defence’ accounted for 24% of GVA in the BMW region and only 10% in the Southern and Eastern region.

Figure 8: Gross Value Added by Sector in the Border, Midland and Western Region

Source: CSO, 2018, County Incomes and Regional Accounts Table 9d GVA by sector

 

Conclusions

GVA is essential regional data, despite its limitations.  It is one of the key variables for national and international regional comparisons and, given the paucity of other regional economic data, it is particularly important.  While understanding the necessity of ensuring data confidentiality, the lack of GVA data for two regions limits discussion of regional development significantly.

Given the focus on regional development in government policy (Project Ireland 2040) we need to be able to measure how regions are doing.  Income, Wealth and Consumption data would give a good picture of how households in regional economies are doing, but while we have regional income data, there is no longitudinal data on wealth and consumption for regions.  Similarly we have Survey on Income and Living Conditions (SILC) data at regional level giving a broader picture of income and poverty, and Labour Force Survey data on employment and unemployment.  However, although these are important, each region also needs to have an indicator of economic activity and growth.

Potentially the issue of confidentiality will not affect data for every year, and 2015 (and 2016 preliminary data) might prove to be exceptions, with full regional GVA data available again in the future.  Nonetheless, the difficulties with regional GDP need to be addressed.  Should new NUTS2 regions be agreed with Eurostat (to align with the regional assemblies) GVA data will published for these.  Currently as both Dublin and the South West are in the NUTS2 Southern and Eastern Region, it is only necessary to withhold data for both of these NUTS3 regions and the NUTS 2 data can be published in full.  In future,  if Dublin and the South West will be in different NUTS 2 regions (Dublin in the Eastern and Midland Region, and the South West in the Southern Region, to ensure confidentiality in relation to these regions, it might become necessary to supress detailed NUTS 3 data for some of the other regions.

It is not clear what solutions might be possible in relation to regional GVA data, but good quality regional data is essential both to understand regional economies and to monito the impact of regional and national policy.  Development of the GNI* indicator at regional level could help to understand activities in domestic regional economies.

Improving our understanding of regional economic growth and change is essential if we are to develop policies and actions to ensure that all regions can grow their economies, employment and value add at more comparable rates into the future.

 

 

Helen McHenry

 

[1] 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 .

[2] For the purposes of regional accounts GVA is the most common measure of regional growth and regional economic activity. However data in Figure 1 (from Table 9) is GVA at market prices (GDP).

[3] The amount for this ‘combined region’ was calculated by subtracting the other regional data from the total.