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Does a Rising tide lift all Boats? A look at the latest CSO data on Poverty and access to Services

The CSO released the latest data on Income and Living Conditions (Survey on Income and Living Conditions SILC) last week, see here. The headline figures indicate a continued rise in incomes between 2017 and 2018 which in turn was higher than the figures five years earlier, in 2012 (see earlier post on this here). This is in line with other national economic indicators such as continuing economic growth, employment growth and decreasing unemployment. To what extent is a rise in incomes reflected in a decline in poverty rates and how is this distributed at a spatial level within Ireland? This post highlights some recent data and asks does a rising tide lift all boats?

Poverty Rates

The CSO produce data on three different poverty measures and here we will examine the different rates as they apply to rural and urban areas.[1]

At Risk of Poverty rate[2]

The at risk of poverty rate nationally decreased from 15.7% in 2017 to 14.0% in 2018.The at risk of poverty rate in rural areas in 2018 is 14.7% compared to 13.6% in urban areas. In both rural and urban areas, the trend is downward – in rural areas (down from 17.2% in 2017), and in urban areas 13.6% (down from 15.1% in 2017). This is illustrated in Chart 1 below.

Deprivation Rate

The CSO also measure the deprivation rate, which is a broader measure than poverty and is defined as follows: Households that are excluded and marginalised from consuming goods and services which are considered the norm for other people in society, due to an inability to afford them, are considered to be deprived.  The set of eleven basic deprivation indicators are detailed below[3]. Individuals who experience two or more of the eleven listed items are considered to be experiencing enforced deprivation.

Nationally, the deprivation rate has decreased over the last few years. In 2016 it was 21% and it has since decreased from 18.8% in 2017 to 15.1% in 2018. At a spatial level it appears that there is a higher rate of deprivation in urban areas than in rural, in 2018 the urban deprivation rate was 16.0% while in rural areas it was 13.4%. Both of these rates have also shown a decrease from one year earlier, in 2017 the rates were 20.2% and 15.9%. This is also shown in Chart 1 below.

Consistent Poverty

Finally, the other commonly used measure of poverty, is the consistent poverty rate. An individual is defined as being in ‘consistent poverty’ if they are

  • Identified as being at risk of poverty and
  • Living in a household deprived of two or more of the eleven basic deprivation items discussed above

Nationally the rate went from 8.2% in 2016 to 6.7% in 2017 to 5.6% in 2018. In urban areas the consistent poverty rate declined from 7.4% in 2017 to 5.5% in 2018. In contrast the consistent poverty rate in rural areas increased slightly; from 5.3% in 2017 to 5.8% in 2018.

Regional Difference

The CSO also publish produce data at NUTS 2 regional level for the different poverty measures.

At Risk of Poverty rate

The regional data indicates that the at risk of poverty rate is higher in the more rural regions (Northern and Western) with 20.1% or a fifth of the population there at risk of poverty in 2018. There was a slight decline on a year earlier (21.8%). This consistent poverty rate in the Southern region is considerably lower 15%, down from 16.8% a year earlier. The Eastern and Midland region has the lowest rate 11.1%, down from 12.8% in 2017.

Deprivation Rate

The deprivation rates are more similar across regions (compared to the at risk of poverty rate), as chart 2 shows, though both the Southern and Eastern and Midland regions recorded more significant declines than that experienced by the Northern and Western Region, so in 2018 the Northern Region has the highest deprivation rate (17.2%), compared to the Southern region (15.2%) and the Eastern and Midland region (14.4%).

Consistent Poverty

A similar pattern is evident when examining the consistent poverty rates by region. In 2017 the Northern and Western Region had the lowest rate (6.4%) but a year later the region reported the highest rate – up to 7.8%. This contrasts with the performance and trends in the other regions both of which recorded declines in consistent poverty levels. The Southern region rate declined from 7.1% in 2017 to 6.5% in 2018. The Eastern and Midland region rate declined from 6.6% to 4.2% in 2018.

Overall the CSO recent data show that rural areas have a higher at risk of poverty rate, compared to their urban cousins, but have lower deprivation rates while the consistent poverty rate is most recently showing an upward trend in rural areas and the Northern and Western region and is higher than urban areas and the Eastern and Southern regions.

Measuring Deprivation: Access to Services?

In a previous blogpost in early 2019, see here, I argued that any measurement of deprivation and poverty is more complicated and other considerations such as access to services need to be taken into account.

Access to services

It is often said that rural poverty and deprivation is more hidden or less visible than that in urban areas and one aspect of this is access to services. The CSO SILC definition of deprivation is based on enforced deprivation where there is an inability to afford goods and services. But what of the inability to access goods and services because they are not available in the locality. The case of broadband is a good example. Most people who cannot access good quality broadband see it as a deprivation. It impacts on a person’s ability to access goods and services on-line and often impacts on their ability to generate their incomes, for small businesses and the self-employed.

What about access to other services? Can limited or no access be considered an indicator or measure of deprivation? The CSO have just published data which provides insights into access to a wide range of services, including transport, health and other services see here. There is extensive data and mapping resources which the WDC will revisit but a snapshot illustrates some interesting differences:

  • The average distance to most everyday services was at least three times longer for rural dwellings compared with urban dwellings. For a supermarket/convenience store, pharmacy and a GP, the average distance for rural residents was about seven times longer.
  • Examining differences by county, residents in Galway County, Donegal, Mayo, Leitrim and Roscommon had higher average distances to most everyday services when compared against other counties.
  • The average distance to 24-hour Garda stations ranged between 1.5km in Dublin City to 19.3km in Donegal, while the average distance to a GP was 3.1km, but was more than 5km in Roscommon, Galway County and Cork County.
  • Half of the people living in Roscommon had to travel 5km or more to visit a GP, followed by Monaghan (48%), Leitrim (43%) and Galway County (43%) as illustrated in the Map below. The darker the colour the higher the percentage of the population living 5km or more from a general practitioner.

Map 1  Percentage of Population 5km or more from a GP location by county

The CSO also provide a useful data dashboard to illustrate in a visual way access to services, see here.

Also this November Trinity published data on data on health and Health services, The Trinity National Deprivation Index 2016 see here . This research examines health and health services at a detailed spatial level (Electoral Division) and highlights regional inequalities.

Conclusions

These different data sources provide really useful insights into the geographic distribution of poverty, deprivation and access to services. Overall, the CSO SILC data indicate that along with rising incomes nationally there is evidence of a decline in poverty rates. However, the exception to this is evidence of rising consistent poverty rates in rural areas and in the Northern and Western region.

After a period of sustained economic growth and rising incomes, it is clear that not all boats are being raised in the rising tide. These data provide a wealth of information highlighting regional and spatial difference and an evidence base for effective policy change. This is a tool to inform Government policy to focus on eradicating poverty and in doing so being cognizant of the spatial patterns of poverty. Various policies ranging from consideration of a new Rural Strategy in the short term to Project Ireland 2040 over the medium to long term are some of the policy frameworks which need to respond to these findings.

 

Deirdre Frost

[1] Urban or Rural are defined as follows: Urban – population density greater than 1,000. Rural is Population density <199 – 999 and Rural areas in counties.

[2] This is the share of persons with an equivalised income below 60% of the national median income.

[3] Two pairs of strong shoes, A warm waterproof overcoat, Buy new (not second-hand) clothes.

Eat meal with meat, chicken, fish (or vegetarian equivalent) every second day, Have a roast joint or its equivalent once a week. Had to go without heating during the last year through lack of money, Keep the home adequately warm. Buy presents for family or friends at least once a year. Replace any worn out furniture. Have family or friends for a drink or meal once a month, Have a morning, afternoon or evening out in the last fortnight for entertainment.

How are we doing? Annual earning in Western Region and other counties

Data on earnings of employees in different counties has just been released by the CSO, providing another important contribution to our understanding of local and regional economic development.

Earnings Analysis Using Administrative Data Sources (EAADS) provides statistics on earnings for which the primary data source is the Revenue Commissioner’s P35L dataset of employee annual earnings which is linked to CSO and other data to provide economic and demographic characteristics.  This new data, along with the Geographical Profiles of Income (also released for the first time this year and discussed on the blog here) and the County Incomes data (discussed here) gives us an opportunity to triangulate different data and gain a better understanding of patterns in earnings and some of the factors contributing to income differences in the region.  Having this data at county level allows for a more nuanced understanding of the situation and trends in the Western Region.

In this post the EADDS annual earnings data is discussed for Western Region counties.  It should be remembered that this data is specifically employee earnings data which is just one element of individual or household incomes.  Other incomes sources (e.g. social welfare, earnings from wealth or profits from business) are not included in this data set.

Annual Earnings, 2018

Looking first at median[1] annual earnings[2] for 2018 (Figure 1), even though all Western Region counties (green) are below the national figure of €36,095 both Galway (€35,632) and Clare (€35,568) are only slightly below, in sixth and seventh place nationally.

Note Total includes Northern Ireland counties not listed above.

Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.15 Median1 annual earnings by county and sex 2018

Donegal had the lowest earnings (€29,298), almost a thousand euro less than Monaghan, the next highest, and more than €10,000 less than the earnings in Dublin (the highest county (€39,408).  Earnings in Roscommon are higher than might have been expected (€34,082, 13th place) from other data such as that for County Incomes, though  in line with Geographical Profiles of Income.

Annual Earnings in Western Region counties

Focussing more specifically on the range of earnings per employee in the Western Region (Figure 2), the gap between the lowest (Donegal) and the highest (Galway) is a €6,334 per year while annual earnings in Mayo and Leitrim are both around €2,500 less than in Galway.  There is only €64 difference in the annual median income per person in Clare and Galway.

Note Total includes Northern Ireland counties not listed above.

Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.15 Median1 annual earnings by county and sex 2018

Changes in Mean Earnings 2016-2018

This data is available for the years 2016, 2017 and 2018.  While this covers a relatively short period it is interesting to examine the change in mean[3] annual earnings over this period throughout Ireland (Figure 3).  Nationally earnings grew by 6.1% over the period with the highest growth rate in Dublin (7.6%) followed by Cork (6.6%) and Kilkenny (6.2%).  The lowest rates of growth were in Cavan (4.4% and Longford (4.4%).

Note: Total includes Northern Ireland counties not listed above.

Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.14 Mean annual earnings by county and sex

Looking more closely at the Western Region (Figure 4), the highest rate of earnings growth was in

Galway (5.8%), and the lowest in Roscommon (4.7%) and Sligo (4.7%).  No Western Region county had earnings growth higher than the national rate.

Note: Total includes Northern Ireland counties not listed above.

Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.14 Mean annual earnings by county and sex

Gender Differences in Earnings

County data is also available by sex, so it is possible to compare earnings in each county for males and females (Figure 5).  In all counties male earnings were higher than female earnings in 2018, with the largest difference in Cork, a very significant €10,205 per year (female earnings were only 76% of male).  Nationally the difference between male and female earnings was €7,394 and the smallest difference in both amount and proportion was in Donegal (€3,153, female earnings 90% of male).  In general, the largest differences between male and female earnings were in the highest earning counties, but Waterford (€8,511), Limerick (€8,318) and Kerry (€7,234), which has the third lowest medial annual earnings, were exceptions to this.

Source: Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.15 Median annual earnings by county and sex

Gender Differences in Earnings in the Western Region

The difference between male and female earnings was smallest in the Western Region.  Six of the nine counties where female earnings were 85% or more of male earnings were in our Region.  Sligo had the narrowest gap nationally (female earnings 91% of male), followed by Donegal (90%), Leitrim (89%), Galway and Mayo (86%) and Roscommon (85%)[4].  Clare was the exception in the region, with female earnings only 80% of male earnings.

The difference in the Western Region are shown more clearly in Figure 6 which highlights the earnings gap (percentage difference in what females earn compared to males).  Clearly Sligo (9%) and Donegal (11%) perform best.  Nationally the picture is bleaker with a 23% annual earnings gap, and in Clare males earn 25% more than females.

Source: Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.15 Median annual earnings by county and sex

Some of this earnings gap is likely to be accounted for by the higher instance of part time working among females. The differences may also relate to earning levels in the different sectors where men and women tend to work, as well as differences in employment types.  Nonetheless, the gap in earnings is very significant but, at least in relation to this statistic, the Western Region is a good performer.  The prevalence of public sector employment in the Western Region (discussed here), along with employment in Education (3 out of 4 people working in the Education sector in the Western Region are women) and Health (21.4% of all working women in the Western Region work in Health & Care, it is the largest employment sector for women in the region), probably influences this.

Changes in male and female earnings over time.

There is no clear pattern for the growth in mean earnings for males and females between 2016 and 2018 in the Western Region counties (Figure 7 below).  In four of the seven Western Region counties female earnings increased by more than male earnings between 2016 and 2018.  This was also the situation nationally (though the difference is small (0.1%)).   Female earnings in Sligo grew by 5.0% while male earnings in the same period grew by 4.0%.  In Clare the difference in earnings growth was more significant (5.7% for females and 4.3% for males).  Galway had the largest growth in female earnings over the period in the region at 6.1%, while male earnings grew by 5.3%.  If this pattern were to continue the gap in male and female earnings would narrow, or even disappear.

Source: Source: CSO Ireland, 2019, Earnings Analysis Using Administrative Data Sources Table 8.14 Mean annual earnings by county and sex

In contrast in three Western Region counties (and a total of nine counties nationally) male earnings grew by more than female earnings between 2016 and 2018.  Leitrim and Roscommon had the lowest female earning growth (4.4%) in the region and nationally.  The difference was most significant in Leitrim where male earnings grew by 5.3% over the same period.  In Donegal the difference was less marked (4.8% for males and 4.6% for females).  Unlike the other Western Region counties discussed above, if this pattern persists in these counties the gap in male and female earnings will widen.

Conclusion

This data set is focused on earning for those in employment rather than broader income data covering households or adults not in employment so it does not give a full picture of income levels.  It is, nonetheless, very useful to have this data at county level.  We can now make robust comparisons between counties and see some of the changes over time.  In future analysis it may be possible to consider in more depth how the different employment patterns and sectors in the counties in turn influence earnings.  Similarly correlations between education and training levels, and skill sets in the counties will help us better understand the needs and opportunities for counties and regions.

In the New Year I hope to have time to compare the data in this release with the other income data available at county level to get a better understanding of what each source is telling us about the trends and differences in the earnings and incomes in the Western Region.

 

Helen McHenry

 

[1] 1Median annual earnings: Half of the employees earn more than this amount and half earn less.  Median is used as it reduces the influence of outliers, in particular exceptionally high earners who could increase the mean significantly.

[2] Employees who worked for less than 50 weeks in the reference year are excluded from the calculations for annual earnings. This is done to improve comparability of the data over time.

[3] Mean is used here for comparison over time to maintain consistency with gender data discussed later.

[4] Monaghan (86%), Cavan (85%) and Kilkenny (85%) were the other counties.

e-Work, Remote work and Hubs, Some Recent Evidence

Introduction

The WDC produced the Policy Briefing e-Working in the Western Region in March 2017, see here. This briefing aimed to quantify the extent of e-working in the Western Region and nationally and set out policy recommendations. Since then e-working or remote working and co-working spaces such as hubs have received a lot of attention, but to what extent is the activity on the increase?

In the Policy briefing, the WDC noted that the extent of e-Working is hard to measure, in part because of the paucity of data, and in part because the practice is sometimes not very visible; it is often in the absence of company policy and at the discretion of local management. Some recent data in relation to official statistics and company practice is presented here.

CSO Pilot for Census 2021

There has been limited official statistics measuring the incidence of working from home. To date the Census has asked the question ‘how you usually travel to work’? with one of the answers being ‘work mainly at or from home’. This is very limited as it only captures those that work from home most of the working week and excludes those who work from home one or two days per week, which some suggest is the most common pattern.

The CSO invited submissions to the consultation on questions for inclusion in Census 2021. In its submission, the WDC advocated for the inclusion of a question to more effectively capture the extent of Working from home/ e-working. Following the consultation exercise and a pilot exercise the CSO have now agreed to include a question measuring the number of days people work from home on a weekly basis in Census 2021. The results of the pilot survey were released earlier this year and they provide an insight into e-working. Some of the findings are highlighted below.

Among those at work, 18% declared they worked from home. The level of non-response among workers was low at 3%. Of those working from home, the breakdown by number of days was as follows:

Working from home 1 day per week was the most popular practice (35%), followed by 2 days a week (13%) and 5 days per week (by 11%). It should be noted over a quarter of those who said they worked from home did not state the number of days. One possibility may be that their pattern changes on a weekly basis.

Profile of those working from home

  • The pilot results showed that the percentage of those working from home increased as age increased, peaking at 19.6% of those at work in the age group 45-49. The proportion of home workers decreased among workers in older age groups. Among those in the 45-49 year age group, 32% worked one day from home.
  • Approximately 60% of people who work from home were male.
  • There were notable differences in the occupation of those who worked from home. e.g. 13.5% of those who worked from home worked in the ‘Science, research, engineering and technology professional’ occupation category.
  • In contrast only 0.6% of those who worked from home indicated they were in the ‘Process, plant and machine operatives’ occupation category
  • Over half of those who worked in ‘Computer programming, consultancy and information service activities’ indicated that they worked from home. This industry comprised 3% of all workers in the Pilot but 11% of all home workers were in this industry.
  • Of those who worked from home, 79% had fixed broadband internet, 18% had mobile broadband internet, and 3% indicated they had no internet connection. It is possible that that much of this 3% do not depend on internet access to conduct their work, for example those engaged in agriculture. See the CSO release here.

The WDC very much welcomes the inclusion by the CSO of the question on working from home in the next Census. This will allow a more thorough analysis of the practice based on comprehensive Census data.

Company Practice- Incidence of e-work in Ireland

Another part of the evidence base is data collected by companies on the extent to which they provide for flexible work practices such as e-working and the extent to which this is practiced by their employees.

IBEC have collected survey data on the extent of e-working for a few years now. Data has been recently published which shows an increasing prevalence of the practice based on a survey of IBEC members. For example,

  • In 2018, 37% of IBEC members (152 companies) had a practice of e-Working/ home-working, on one or two days per week basis, up from 30% (110) in 2016.
  • In 2018, 7% had a practice of e-Working five days per week, up from 5% in 2016.
  • The IBEC survey shows that the likelihood of e-Working among companies increases with company size, so that 54% of companies with 500+ employees cite a practice of e-Working on a 1 or 2 days a week basis.
  • There is a slightly higher rate of e-Work among foreign owned compared to Irish owned companies, 40% and 33% respectively, and both these figures are up on two years previously – 34% and 27% respectively.
  • Sectorally the highest rates are within the Electronic services sector (69%), followed by the Financial services sector (58%).
  • At a regional level IBEC members in the Dublin region have the highest incidence, with almost half (49%) report having an e-working policy of 1-2 days working from home per week. This rate drops to one-third of companies in the Cork region, one-quarter in the Mid-West and South-East and 24% in the West/North West.

This regional variation supports the idea that at least some of the e-working demand and take-up by employers is driven by congestion in larger urban centres.

Demand for e-working/co-working spaces/ Hubs

Another aspect of e-working or remote working is where the worker works from a hub rather than home. The success of initiatives variously called e-working spaces/ co-working spaces/ hubs also suggests e-working is on the increase. Some working spaces are funded by Department of Business, Enterprise and Innovation and some by the Department of Rural and Community Development. The hubs are variously classed as innovation, enterprise or community hubs, and many are focussed on start-ups and incubation spaces as well as providing e-working spaces for individual employees.

The Western Development Commission is coordinating an initiative with the Department of Community and Rural Development (DCRD) called the Atlantic Economic Corridor (AEC) Enterprise Hubs project. This three year project aims to create an interconnected community network from the 101 hubs identified in the AEC region (the region from Donegal to Kerry) along the Western Seaboard.

This week the WDC is convening two workshops, one in Limerick (19th November) and the second in Sligo (Thursday 21st November) aimed at bringing all key stakeholders together to work together to optimise the operation of the hubs and how they can support regional and rural development, e-workers and remote workers throughout the region. For further information see here for more information.

 

 

Deirdre Frost

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

Aviation trends, Government Policy and Ireland’s airports

The Department of Transport, Tourism and Sport is preparing a new Regional Airports Programme 2020-2024 and has sought the views of stakeholders. The WDC has made a submission which is available for download here. The WDC views are set out in the context of aviation trends, Government policy and airport capacity across Ireland.

Aviation Trends & Implications

The latest CSO Aviation statistics, Quarter 4 and Year 2018, see here, highlight the trend of the increasing concentration of air passengers travelling through Dublin airport compared to other airports. For example, in 2014, Dublin accounted for 81.9% of all passengers (total = 26.5 million), compared to 85.6% in 2018 (Total = 36.6 million). This represents an increase of 9.6 million passengers in 4 years, a 44.2% increase, with Dublin Airport accounting for 95.2% of total passenger growth in that period. So along with a significant increase in total air passenger numbers, there is an ever-increasing share travelling through Dublin airport.

The WDC believes that without more active intervention, further concentration of air traffic is likely. An ever-increasing share of passenger traffic through Dublin Airport is not in the State’s best interest (from a safety and security perspective) as well as counterproductive in delivering on targets within Ireland 2040.

Globally, it is difficult for smaller airports to compete with larger airports. For example, 80% of airports in the world have fewer than a million passengers per annum and 94% of these airports are loss-making[1]. This is one of the reasons that the EU allows State aid under certain conditions to support smaller airports.

Government Policy: Project Ireland 2040

There needs to be consideration of how the airports of Shannon, IWAK and Donegal can be more effectively supported through policy changes and State aid to deliver on the targets of the NPF and effectively on the role in supporting the economic growth of their respective regions (planned under Ireland 2040). The overarching policy objectives of Project Ireland 2040 state;

We need to manage more balanced growth … because at the moment Dublin, and to a lesser extent the wider Eastern and Midland area, has witnessed an over concentration of population, homes and jobs. We cannot let this continue unchecked and so our aim is to see a roughly 50:50 distribution of growth between the Eastern and Midland region, and the Southern and Northern and Western regions, with 75% of the growth to be outside of Dublin and its suburbs[2].

Policy and funding alignment

Given the recent Government commitment to Project Ireland 2040, sectoral policies need to be updated in order to effectively support the overarching objectives of Ireland 2040. If not, then Ireland 2040 is likely to fail. The National Aviation Policy (NAP, 2015) predates the publication and consideration of Ireland 2040 but can be seen to unduly reinforce the dominance of the larger airports (Dublin in particular).  Now that Project Ireland 2040 is Government Policy, the NAP should be reviewed and updated in light of the overarching objectives of the NPF. In the absence of reassessment and updating it is difficult to see how development can move away from a ‘business as usual’ approach and how the NPF can achieve its targets. It is sectoral planning and policy that are the real drivers of spatial and regional development.

The WDC believes that changes are required to more effectively support the growth of the airports in the Western Region, namely, Donegal, Ireland West Airport Knock (IWAK) and Shannon, to enable them to deliver on NAP and the regional targets contained in the more recently published Project Ireland 2040.

Airport Catchments

As the maps below show IWAK serves a very large catchment relative to some of the other airports. The planned road improvements for the North West will help support greater traffic through Ireland West Airport, which in turn will allow the airport better serve the catchment to its north including Sligo – a designated regional centre under Project Ireland 2040. The planned road improvements must be prioritised.

Maps 1 & 2: 30-min and 60-min catchment areas for Ireland’s airports

Source: Spending Review 2019, A Review of the Regional Airports Programme, DTTaS, IGEES

As the Department’s consultation document notes, though passenger numbers at all four regional airports are less than 1 million annually, just one airport – IWAK – has more than 400,000. IWAK has had annual passenger numbers in excess of 700,000 for the last three years and is forecast to have passenger numbers exceeding 800,000 in 2019. This is because Ireland West Airport Knock essentially serves the same purpose for its region (the North West) as the State airports perform in the Mid-West, South-West and East respectively, illustrated by the maps above. This needs to be recognised in an updated NAP.

Donegal serves a large catchment within a 60-minute radius and given the geography of Donegal, the relatively poor surface accessibility and the likely impacts of Brexit, it is important that support for Donegal continues.

Shannon Airport is the second largest airport in Ireland (in terms of capacity of the airport campus) and is a critical element in the transport infrastructure of the mid-west region, serving the significant industrial cluster of Shannon and the wider catchment as illustrated in the maps. It is therefore important that it operates optimally to help deliver the objectives of Project Ireland 2040, to enable the cities of Limerick and Galway on the Western seaboard, to each grow by at least 50% to 2040 and to enhance their significant potential to also become cities of scale[3].

The WDC considers that with Dublin Airport now operating at or near capacity, and capacity available at other airports such as IWAK and Shannon, cost-efficient and accessible alternatives to Dublin should be utilised and promoted. Shannon, IWAK and Donegal are important airports serving the Mid-west, West and North west of the country and policy and funding needs to effectively support them.

Industry view

 Exporters are also concerned with the ever-increasing concentration of traffic through Dublin Airport For example, the Irish Exporters Association (IEA) advocate for support for better air connectivity from the West of Ireland such as direct access to a European hub airport.  The IEA submission[4] to the Draft National Planning Framework noted that of those IEA members surveyed many said that they would use a different Irish airport as their primary route to move goods from Ireland if:

  • There were more frequent flights from another airport – 36%
  • Road networks between primary distribution centre and another airport were improved – 23%
  • Another airport was upgraded – 14%

These views are likely to be attenuated with Brexit.

In our submission, along with an updating of National Aviation Policy to align policy with Project Ireland 2040, the WDC propose some amendments to the existing operation of the Regional Airport Programme, see here for more detail.

 

Deirdre Frost

[1] ACI Report https://aci.aero/news/2019/03/28/aci-economics-report-affirms-the-importance-of-non-aeronautical-revenues-for-airports-financial-sustainability/

[2] Project Ireland 2040, NPF, 2018, p.11

[3] https://www.gov.ie/pdf/?file=https://assets.gov.ie/166/310818095340-Project-Ireland-2040-NPF.pdf#page=1 p.22.

[4] IEA Submission https://irishexporters.ie/wp-content/uploads/2019/03/IEA-Submission_Draft-of-the-National-Planning-Framework.-Nov-17.pdf

Regional Sectoral Profiles: The Complete Collection

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

So it all began in October 2018 with …

Wholesale & Retail (Oct 2018)

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

Health & Care (Nov 2018)

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

Education (Jan 2019)

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

Industry (Feb 2019)

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

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

Accommodation & Food Service (Mar 2019)

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

Agriculture, Forestry & Fishing (Apr 2019)

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

Administrative, Entertainment & Other Services (May 2019)

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

Financial & ICT Services (Jun 2019)

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

Public Administration & Defence (Jul 2019)

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

Professional Services (Jul 2019)

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

Construction (Aug 2019)

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

And finally …

Transportation & Storage (Sep 2019)

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

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

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

Wishing you all the best

Pauline White

Transportation & Storage Sector in the Western Region

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

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

Employment in Transport & Storage

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

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

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

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

Transport & Storage sub-sectors

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

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

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

Gender pattern and self-employment

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

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

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

Employment in western towns

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

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

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

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

Transport & Storage Enterprises

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

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

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

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

Source: CSO, Business Demography 2017, Table BRA18.

Key Policy Issues

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

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

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

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

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

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

Pauline White

 

Photo The Shannon Group

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

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

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

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

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

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

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

New Infographic: Enterprise in the Western Region 2017

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

Enterprise in the Western Region 2017

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

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

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

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

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

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

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

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

County Data

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

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

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

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

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

Conclusion

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

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

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

Pauline White

Infographic designed by Resonate Design

 

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

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

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

The Construction Sector in the Western Region

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

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

Two publications are available:

Employment in Construction

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

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

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

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

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

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

Employment in Construction in western towns

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

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

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

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

Self-employment in Construction

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

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

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

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

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

Construction Enterprises and Persons Engaged

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

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

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

Source: CSO, Business Demography 2017, Table BRA18.

Key Policy Issues

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

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

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

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

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

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

Pauline White

 

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

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

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

[4] Data is from CSO, Business Demography 2017

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

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

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

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

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