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The Benefits as well as the Costs of the National Broadband Plan

There are significant benefits associated with the planned rollout of the National Broadband Plan (NBP), though the recent media coverage seemed to focus largely on the costs.

A review of newspaper headlines over the period following the announcement of the preferred bidder and the likely cost of the National Broadband Plan (NBP), suggests that the overall benefit is significantly lower than the cost. For example some of the headlines included;

  • Its wrong to endorse broadband plan and ignore officials’ warning on costs, Independent, 12 May 2019
  • National Broadband Plan, labelled ‘the worst deal ever seen’ Irish Examiner, 13 May 2019
  • Government to press ahead with €3bn broadband plan despite cost warnings, 26 April, 2019

But in reality, the cost benefit analysis (CBA) conducted by consultants on behalf of the Department of Communications, Climate Action and Environment, found that under all three different scenarios considered, the benefits outweigh the costs. The CBA also made clear that many benefits were not included in the computations and some of the benefits were estimated on a very conservative basis.

The Costs and Benefits of the National Broadband Plan

The table below shows the costs and benefits anticipated under three different scenarios; pessimistic, central and optimistic. There is a detailed analysis showing how each of the costs and benefits are computed, all of which is published and available for download on the Department of Communications website, see here  (825KB)

Costs: The total project costs include both costs to the State and costs to the operator.

Benefits include benefits to residents and enterprises. The residential benefits refer to the residents who will benefit from the NBP through various savings which will be made in communications services, time savings through online access of services as well as time and cost savings from remote working.

The enterprise benefits refer both to benefits to all firms, those within the NBP area and those outside it.

For firms outside the NBP area one of the largest benefits to be realised is that many of their staff (who live in the NBP area) will now have better broadband access enabling productivity gains from remote/tele-working.

For firms within the NBP area, all SMEs will benefit. Farm enterprises will be able to engage in smart farming, while all SMEs will benefit from higher upload and download speeds to serve their clients and suppliers more efficiently.

Scope of Costs and Benefits

Table 1 shows that under all three scenarios the benefits of the NBP exceed the costs. In the analysis, the entire range of costs have been considered and furthermore they are capped and there are various clawback mechanisms to ensure limited and capped costs to the State.

The benefits that have been measured are just some of the range and a whole range of benefits have not been included. As the CBA report notes, in including and profiling benefits, the consultants adopted a deliberately conservative approach to ensure benefits were not overstated. As a result, there are important categories of benefits which are not quantified and therefore not included in the CBA analysis. Table 2 below provides an overview of these benefits and examples of how households and enterprises in the NBP area may benefit.

Measuring benefits – Other international examples

In making the case for various state supports and state aid for broadband investment, other countries have also grappled with how to measure and capture benefits. While investment in fibre networks can be evaluated in a similar fashion to investment in other infrastructure, technological innovation and new product and service developments are continually extending the range of benefits from investment in broadband infrastructure generally and fibre deployment in particular. Consideration of these other benefits is not new and other countries have valued the benefits of fibre rollout across various sectors.

For example, research undertaken in Sweden provides some economic calculations on additional returns to fibre which need to be captured in evaluation. In Sweden, higher rents are charged for homes with fibre connectivity. Tenants pay an extra €5.50 per month for a home with a fibre connection and this is valued at €267 million per year for all fibre connected homes, which yields €185.6 million per annum return on investment.

Investment in fibre networks can also reduce telecommunications costs to the user, for example the Stockholm Regional Council (regional government) reduced its telecommunications costs by 50% following deployment of the fibre network. This is attributed to increased efficiency and greater competition with more telecommunication operators providing services on the high capacity fibre network.

The development of eHealth technologies including remote monitoring and diagnosis will provide opportunities to deliver some healthcare direct to the community rather than through hospitals. Community care is generally significantly less expensive than hospital care. The greater bandwidth and symmetrical (upload and download) speeds with fibre networks can support those applications requiring very good upload and download speeds. As many of these applications such as eHealth are still being developed, it is difficult to estimate their full value and benefit.

At a wider economy level, the OECD has examined the benefits arising to other economic sectors (transport, health, education and electricity) of a national ‘fibre to the home’ network. The analysis examines the cost of deploying ‘fibre to the home’ across different OECD countries, including Ireland, and has estimated that the combined savings in each of the four sectors over a 10 year period could justify the cost of building a national ‘fibre to the home’ network. These examples are outlined in the WDC report, Connecting the West, Next Generation Broadband in the Western Region, see here (1.5MB).

Measuring the benefits of State investment should also take account of the impact on other Government policy objectives. More balanced regional and rural development and greater regional economic growth are important Government policy objectives.

State Aid

The Telecoms sector just like most other economic sectors are subject to strict EU State Aid Rules. State aid is subject to very strict criteria, one of which is that there is market failure. In the NBP areas, defined according to a detailed mapping process which was undertaken as part of the requirements for State aid, it is clear that no commercial deployment of high speed broadband has been or is likely to occur. This is then a case of market failure. Just as with other utility provision (transport, water, energy) the State intervenes where commercial provision does not occur.

One of the other criteria for State aid is that the aid serves an Objective of Common Interest. The European Commission’s Digital Agenda for Europe (DAE) is an objective of common interest to which Ireland has committed and this sets out a minimum of 30Mbps download for all homes and businesses by 2020. Given the increasing demand for higher speeds the EU Commission has revised upwards the target for member states which is now to achieve a basic service of 100 Mbps for all households by 2025. This objective and need to reduce the current digital divide complies with State aid requirements.

Conclusions

The NBP has been subject to probably the most extensive, thorough and comprehensive evaluation both within various Government Departments as well as across the wider public domain.

When the benefits exceed the costs, and the costs are capped while the benefits that are measured are only partial and conservatively estimated then the results of the CBA are positive and clearly make the case to proceed with the investment.

The full report on the benefits from the NBP (February 2019), is available for download on the Department of Communications website, available here (2.5MB).

The NBP Cost Benefit Analysis report (April 2019), is available for download for the Department of Communications, see here  (825KB).

 

 

Deirdre Frost

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

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

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

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

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

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

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

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

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

High and growing self-employment

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

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

Important contribution to town centre renewal

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

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

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

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

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

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

Some of the implications of this are:

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

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

Pauline White

 

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

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

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

Smaller Labour Catchments across the Western Region

Travel to Work Areas and Labour Catchments

Analysis of travel to work data can be used to identify the geographic catchment from which a town draws its workforce, otherwise known as its labour catchment. Measurement of labour markets based on Travel to Work Areas (TTWAs) has been well established in the UK for many years, helping to inform various public policies ranging from employment to transport provision. Companies and large employers use TTWAs to help identify optimal locations to access labour supply.

The use of TTWAs is less well established in Ireland, and where used has largely been focussed on the larger cities especially Dublin. There has generally been little focus on labour catchments in other centres or more rural regions.

The Western Development Commission (WDC) has worked with the All Island Research Observatory (AIRO) to examine the labour catchments of towns across the Western Region based on Census of Population data 2006 and 2016. The town labour catchments show that area from which a town draws most of its labour supply; each catchment is based on the inclusions of Electoral Divisions (EDs) that are assigned to a town, based on commuting to work flows.

Last year the WDC published the findings on the labour catchments of the principal towns of the seven counties of the Western Region (Galway, Ennis, Sligo, Letterkenny, Castlebar, Roscommon and Carrick-on-Shannon). The full report Travel to Work and Labour Catchments in the Western Region, A Profile of Seven Town Labour Catchments is available for download here (14.2MB). Each of the individual town reports are also available to download separately (Galway City, Sligo Town, Ennis,  Letterkenny, Castlebar, Carrick-on-Shannon, Roscommon).

The WDC is now publishing the findings of the other smaller catchments across the Western Region. This is the first time such detailed labour market analyses have been undertaken for the smaller centres across the Western Region. These data and findings can inform local and regional economic development and help support appropriate policies to ensure optimal local and regional development.

Smaller Catchments

The WDC identifies 26 labour catchments, which complement the 7 labour catchments of the principal towns in each of the counties which were published in 2018, see above.

In these 26 publications, the WDC draws on Census 2016 POWCAR (Place of Work Census of Anonymised Records) data to examine the travel to work patterns in centres with a population greater than 1,000 across the Western Region.

These 26 smaller catchments provide insights into the travel to work patterns of workers living there which are then used to generate labour catchments which show the geographic area from which each town draws most of its workers. Each town’s labour catchment has many more workers living there than the Census measure of the town’s resident workforce and it is a better measure of labour supply. This is particularly useful when considering employment and investment decisions.

Socio-economic profiles

Each of the reports identify the place of work of the resident workforce and provides detailed analysis of the socio-economic profile of workers providing information on age, gender, education levels, and sector of employment. There are comparisons with the rest of the Western Region and the State Average. There is also trend analyses indicating the extent of change between 2006 and 2016.

For ease of presentation the 26 smaller catchment reports are presented by County. Below are links to each of the 26 reports. In practice labour catchments extend across county boundaries, indeed that is one of the rationales for considering labour catchments rather than administrative boundaries; people travel to work regardless of county boundaries and these patterns and catchments provide a better evidence base for informing policy.

Some key points include:

  • Labour Supply: All the town labour catchments have significantly more people at work than the Census population at work for that town and have therefore access to a larger labour supply than normal Census definitions would indicate.
  • Profile of ‘Rural’ employment: The profile of employment in these smaller centres provide important insights into ‘rural’ employment, which is much are complex and varied than the perception of rural as largely agricultural employment.
  • Trends: Changes over time, in both place of work and the socio-economic characteristics of workers indicate little change in the geography of labour catchments but much change in the profile of resident workers, most notably in their age and education levels.

County Clare

The two labour catchments within Co. Clare have both recorded an increase in workers resident in the catchments. The Shannon labour catchment is concentrated around the Shannon Free Zone and Shannon Airport and is geographically compact. The Kilrush labour catchment is more extensive and now incorporates a previously separate Kilkee labour catchment. In both there is evidence of longer distances travelled to work than previously.

County Donegal

There are 8 smaller catchments located within Co. Donegal, reflecting the large size of the county, its geography with an extensive border both with Northern Ireland and the sea, and the relatively small size of some of the catchments.

Of the 8 labour catchments, 5 recorded a decline in the number of resident workers in the decade between 2006 and 2016. The three that recorded an increase in resident workers are Donegal, Dungloe and Carndonagh,  illustrating that some more remote areas are experiencing growth.

Each report identifies the top 10 work destinations for residents living in each labour catchment and the extent of cross border commuting is presented.

County Galway

There are 4 smaller catchments located within Co. Galway and just one, Gort labour catchment, recorded a decrease in the number of workers living there over the decade 2006-2016. Clifden, Tuam and Loughrea labour catchments recorded increases of varying degrees. The data presented also shows the extent of commuting between catchments, for example from Tuam, Loughrea and Gort labour catchments to Galway city.

County Leitrim

Apart from the county town labour catchment of Carrick-on-Shannon, there is just one smaller catchment located within Co. Leitrim, namely Manorhamilton. The number of resident workers in the Manorhamilton labour catchment increased over the ten year period and there is data to show more people are now working in Manorhamilton . The influence of some key employers is evident. Data on dross border commuting is also presented.

County Mayo

There are 8 smaller catchments located within Co. Mayo. Just two of the eight recorded a decline in the numbers of resident workers between the period of 2006 and 2016, these were Belmullet and the Charlestown/Knock Airport catchment. The other 6 recorded increases of varying degrees from 31% increase in the Westport labour catchment to an increase of 2.4% for the Ballina labour catchment. The most important places of work across each catchment are presented along with the labour market profiles of workers living there.

County Roscommon

There are 3 smaller catchments located within Co. Roscommon. All 3 recorded a decline in the numbers of workers resident there. In the case of Boyle and Ballaghaderreen, the geographic size of the labour catchments also decreased slightly. The data presented show the sectors in which people worked, the extent to which people worked inside the town and those who worked outside the town but within the wider catchment and the changes over the 10 years. Across all catchments there is a very significant increase in the level of third level education among the workforce.

 

Deirdre Frost

1 in 4 working in Agriculture, Forestry & Fishing in Ireland live in Western Region

The WDC has just published the sixth of its ‘Regional Sectoral Profiles’ analysing employment data for the Western Region on different economic sectors.  The latest looks at Agriculture, Forestry & Fishing and two publications are available:

Agriculture, Forestry & Fishing is a complex sector which plays many economic, societal and environmental roles.  This analysis only examines direct employment of those whose main economic activity is working in the sector, as reported in the Census.  It does not include persons who farm part-time but have another ‘main’ job or are retired.  It includes people working on farms, fishing vessels, aquaculture farms, forestry and stables but not in agri-food processing.[1]

Of everyone working in Agriculture, Forestry & Fishing in Ireland, 25.5% of them live in the Western Region, far higher than the region’s 16.6% share of total national employment.  Of all economic sectors, Agriculture, Forestry & Fishing is where the Western Region accounts for its highest share of total national employment.

Employment in Agriculture, Forestry & Fishing

According to Census 2016, 22,733 people were employed in Agriculture, Forestry & Fishing in the Western Region and it is the region’s sixth largest employment sector.[2]  The restructuring of Ireland’s economy towards services activity and high value manufacturing, as well as intensification and increased agricultural productivity, has substantially reduced the significance of Agriculture, Forestry & Fishing’s as a source of full-time employment (Fig. 1).

Fig. 1: Percentage of total employment in Agriculture, Forestry & Fishing 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

The downward trend was reversed somewhat in 2011 as there was an increase in the number of people working in the sector between 2006 and 2011.  Massive construction job losses meant that some part-time farmers, who had been working in the building industry, reverted to full-time farming.  Also, job losses elsewhere in the economy increased the relative importance of this sector.  2016 saw a return to the downward trend.

This sector has consistently accounted for a higher share of employment in the region than nationally over the past two decades.  While the region and state followed similar patterns, the gap narrowed.  In 1996 the share of total employment accounted for by Agriculture, Forestry & Fishing in the region was 6.4 percentage points higher than in the state (15.6% compared with 9.2%) by 2016 the gap had narrowed to 2.4 percentage points (6.8% compared with 4.4%).

At a county level, in 2016 Agriculture, Forestry & Fishing was most important in Roscommon (9%), followed closely by Leitrim (8.6%) and Mayo (8.5%).  All other western counties have around 7% working in the sector and are considerably above the national average.[1]

Agriculture, Forestry & Fishing sub-sectors

Census data on employment in Agriculture, Forestry & Fishing is sub-divided into six separate activities.  For ease of interpretation, these have been combined here into four sub-sectors.  ‘Animals & Mixed Farming’ dominates and accounts for 88.6% of total employment in the sector in the region, a notably higher share than nationally (82.6%) (Fig. 2).  This sub-sector dominates in all counties, particularly Clare and Sligo and is least important for Donegal.

Fig. 2: Percentage of total Agriculture, Forestry & Fishing employment in each sub-sector in Western Region and state, 2016

Source: CSO, Census 2016: Summary Results Part 2, Table EZ011.
Due to the low numbers involved, Galway City is not included in the chart, but is included in the Western Region total.

‘Tillage, Horseracing & Other Farming’ accounts for a small share in the region (5.1%), less than half its share nationally (12.6%), reflecting the Western Region’s reliance on cattle and sheep farming.  ‘Forestry & Logging’ is the smallest in the region (2.6%).  At 6.4%, Leitrim is where ‘Forestry & Logging’ is most important to employment.

The role of ‘Fishing & Aquaculture’ in Donegal’s economy is clear.  It accounts for 14.3% of total Agriculture, Forestry & Fishing employment in the county (567 people) with Killybegs likely the main location.  Galway County (2.4%) and Mayo (2.2%) are the only other western counties with a notable share working in this activity.  The Western Region makes a very substantial contribution to this sector and is home to 43% of national ‘Fishing & Aquaculture’ jobs.[1]

Agriculture, Forestry & Fishing related occupations

People working in this sector are engaged in a range of different occupations.  In 2016, there were 24,014 people in the Western Region who reported themselves with an Agriculture, Forestry & Fishing related occupation[2] (Table 1).

The vast majority (86.9% in the Western Region) of those in Agriculture, Forestry & Fishing related occupations are farmers.[3]  At 20,880, farmers are the Western Region’s second largest single occupational group.  They dominate in all counties, most strongly Clare, Sligo, Roscommon and Galway County.  Donegal is where they account for their smallest share (76.2%) due to the strength of the fishing industry.

Table 1: Percentage in Agriculture, Forestry & Fishing related occupations in Western Region and state, 2016

Source: CSO, Census 2016: Profile 11 – Employment, Occupations and Industry, Table EB049.
Due to the low numbers involved (181 in total) Galway City is not included in the table but is included in the Western Region total.

The next largest is ‘Elementary Agricultural’ which includes unskilled occupations.  These are most important in Donegal (11.2%), with a high proportion of both farm and fishing workers.  Leitrim has the next highest share (9.3%) mainly due to forestry workers.  ‘Other Skilled Agricultural & Related Trades’ is also most important in Donegal is (11.8%) almost entirely due to skilled fishing trades, Galway County is next highest (4.3%) and for the same reason.

Conclusion

Despite declines, Agriculture, Forestry & Fishing continues to play a larger role in the region’s labour market and any changes in the sector would have a greater employment impact in the region and its rural areas in particular.  The sector is highly exposed to Brexit and it is vital that the issues and needs of this sector in the Western Region, characterised by smaller scale operations, is addressed in Brexit adaptation efforts.

The Western Region plays a strategic role in Ireland’s Fishing & Aquaculture sector.  Ireland’s seafood sector has shown strong recent growth, predominantly export-led.  Brexit however poses many challenges and addressing these will be vital to future jobs growth in this sector.  The region’s forestry resource is a valuable asset, supplying the construction industry with quality product.  The region is also well placed to further develop a wood energy sector using by-products to stimulate local job creation as well as increase renewable energy use.

Future changes in the pattern and activities carried out by the Agriculture, Forestry & Fishing sector, as a result of climate change mitigation and transition to a low carbon economy, could have significant positive and/or negative impacts on employment.  The nature and scale of such impacts is currently unclear however and will be one of the most important factors influencing this sector’s long term future.

For more, download Agriculture, Forestry & Fishing Employment in the Western Region: Regional Sectoral Profile and WDC Insights: Agriculture, Forestry & Fishing Employment in the Western Region here

Pauline White

 

[1] This regional strength is also reflected in the region’s 47.6% share of national employment in seafood processing, see WDC (2019), Industry in the Western Region: Regional Sectoral Profile

[2] This differs from the number working in the sector because unemployed persons are included in occupations data (under their last employment) but not in employment data, some people working in these occupations may work in another sector (e.g. a horticulturalist working for a landscaping company) and some people working in this sector may have different occupations (e.g. a bookkeeper at an aquaculture farm).

[3] See this WDC Insights blogpost ‘How many farmers are in the Western Region?’ for a discussion of different definitions and ways to measure the number of ‘farmers’.

[1] At 0.5% of total employment (163 people), Galway City is an exception.  Given the low numbers involved, Galway City will be excluded from much of the following analysis but it is included in the figures for the Western Region as a whole.

[1] Agri-food processing forms part of the Industry sector and was examined in a previous Regional Sectoral Profile, WDC (2019), Industry in the Western Region: Regional Sectoral Profile https://www.wdc.ie/publications/reports-and-papers/

[2] These are people who recorded in the Census that their main employment was in this sector.  Therefore someone who farms/fishes part-time but has another job (which they recorded as their ‘main’ employment) would not be included.

Travel to Work Areas and Border Labour Catchments

The WDC will present analysis on Travel to Work Areas (TTWAS) and the smaller labour catchments located along the Border at a conference in Derry, organised by NERI on 1st May see here for more details.

This work is part of a larger piece of work examining the smaller labour catchments across the Western Region which in turn is part of the WDC programme of research on Travel to Work Areas and Labour Catchments which has been a key element of the WDC Policy Analysis work programme for the last 10 years.

The work on smaller labour catchments follows on from the WDC report published in 2018, Travel to Work and Labour Catchments in the Western Region, A Profile of Seven Town Labour Catchments (2018). This provides a detailed labour market profile of the principal towns in each of the seven counties of the Western Region, based on travel to work patterns, namely: Galway, Ennis, Sligo, Letterkenny, Castlebar, Roscommon and Carrick-on-Shannon and is available for download here. (14.2MB)

The map below illustrates all the labour catchments across the Western Region, arising from the analysis of Census 2016 data.

Map 1 Labour Catchments across the Western Region 2016

The analysis of smaller labour catchments reviews the remaining 26 complete labour catchments contained within the Western Region and the 26 reports will be published shortly. Here is a sneak preview of some findings and points of interest.

The 26 complete smaller labour catchments are distributed across each of the counties of the Western Region as the table below shows.

Table 1 The 26 smaller Labour Catchments in Western Region Counties, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

The smaller labour catchments range in size from the largest, Ballina in Co. Mayo with 9,034 resident workers, to the smallest, Charlestown-Bellahy with 962 resident workers.

Each labour catchments has a greater number of workers living there compared to the figure reported in the Census for the town at its core, indicating a greater labour supply available than might otherwise be considered.

Of the 26 smaller labour catchments 15 reported an increase in numbers over the 10 year period from 2006 to 2016, while 11 of the smaller labour catchments reported a decline in numbers over the same period.

Generally, those that reported a decline are somewhat remote, for example five of those that reported a decline are located in Co. Donegal, namely, Ballybofey-Stranorlar, Buncrana, Killybegs, Bunbeg and Ballyshannon. Belmullet in west Mayo also recorded a decline in the number of resident workers living there over the 10 year period. A further four catchments in east Mayo/Roscommon reported a decline; namely Charlestown, Ballaghaderreen, Boyle and Castlerea, while Gort in co. Galway also had a decline in resident workers living there over the 10 year intercensal period.

In the case of the labour catchments in Co. Donegal, the larger labour catchments of Donegal town and Letterkenny, both recorded an increase over the period indicating move from the smaller more rural catchments in the county to the larger centres and this in part accounts for the changes.

For the centres in Mayo and Roscommon which reported a decline in numbers, some of this can be accounted for by growth in adjacent centres such as Castlebar and Carrick-on-Shannon but further analysis is needed to explain the changes in detail.

There is also some evidence of greater levels of longer distance commuting to Dublin and other locations, for example, the numbers travelling from the larger catchments of Galway city, Sligo and Ennis to work in Dublin has more than doubled over the 10 year period. This trend is likely to be evident for the smaller centres also.

However, it is also true that rural areas remain very important places of work. Across many of the 26 labour catchments the second most important place of work after the town itself is the rural parts of the county. Smaller centres and rural areas are very important employment centres and the analysis will show that this employment extends across sectors such as Education, health and Social Work, Manufacturing and Wholesale, Retail and Commerce.

Further detail will be available following the presentation at the NERI conference and will be posted here

 

Deirdre Frost

 

 

Strong recent growth in overseas & domestic tourism in the Western Region, but considerable variation across counties

Given that it’s mid-term break and the summer season is fast approaching, this is a good time to look at the role and importance of the tourism sector in the economy of the Western Region.

Because of its importance as a source of demand for the hospitality industry, though the balance between tourist and local demand varies considerably across the region, our recent publication ‘Accommodation & Food Service Sector in the Western Region: Regional Sectoral Profile’ included a section examining tourism data.  This post looks at visitor numbers and revenue from both overseas and domestic tourists visiting the Western Region.  The data is from various Fáilte Ireland reports on regional tourism performance.

Overseas tourist revenue in western counties

In 2016[1] overseas tourists visiting the Western Region generated total revenue of €838m.  This was 18.1% of total overseas tourism revenue[2] generated in the state in that year.

The largest source of overseas tourism revenue for the Western Region is North America (35.4%), considerably higher than this market’s share nationally (Fig. 1).  The next largest is Mainland Europe which accounted for a somewhat lower share in the region than nationally.

The region differs considerably from the state in the lower share coming from ‘Other Areas’ (e.g. Asia, Australia).  It seems that visitors from emerging and long-haul markets are less likely to visit the region than elsewhere in Ireland. A key factor in this is access.  As international air carriers from these locations fly in to Dublin Airport, increasing road, rail and bus accessibility from Dublin to the region is vital to growing visits from these new markets.

Fig. 1: Percentage of total overseas tourism revenue by market in Western Region and state, 2016

Source: Fáilte Ireland, Regional tourism performance in 2016 (revised March 2018); Fáilte Ireland, Tourism Facts 2016 (August 2017)

The relative importance of different markets varies across counties.[3]  Britain is the largest source of overseas tourism revenue for Roscommon, Leitrim, Donegal and Mayo.  This is influenced by their large diasporas in the UK as well as direct UK flights to Ireland West Airport Knock, Donegal Airport and City of Derry Airport.  For Roscommon and Leitrim it may also reflect their lower profile among visitors from the US or Europe.  The tourism sector in these four counties is therefore quite exposed to the impact of Brexit.

North American visitors are the largest source of revenue for Galway and Clare (jointly with Mainland Europe) reflecting these counties’ position as international tourist destinations, with direct flights to Shannon Airport playing a role.

Change in overseas tourist revenue and numbers

Between 2011 and 2016, total overseas tourism revenue generated in the Western Region grew by 35.8% compared with 58.9% nationally (Fig. 2) showing a somewhat lower level of recovery.  While it is not possible to calculate total overseas tourist numbers for the Western Region as a whole due to double-counting, all western counties experienced growth in visitor numbers.

Overseas visitor numbers grew by 38%-58% in Donegal, Clare, Galway and Leitrim and these four counties also showed the strongest revenue growth.  They also had the strongest hospitality jobs growth over the same period clearly illustrating the strong link between overseas tourism and hospitality employment.

Donegal experienced substantially greater revenue growth than numbers growth indicating that each visitor spent more per trip (perhaps by staying longer) with Leitrim and Clare also seeing higher spend per overseas visit.  In contrast, Galway had lower growth in revenue than numbers with its growing popularity as a ‘city-break’ destination leading to more, but shorter, visits.

Fig. 2: Percentage change in overseas tourism revenue and overseas tourist numbers in Western Region and state, 2011-2016

Source: Fáilte Ireland, Regional tourism performance in 2016 (revised March 2018); Fáilte Ireland, Tourism Facts 2016 (August 2017); Fáilte Ireland, Overseas Visitors to Counties in 2011 and Associated Revenue (revised July 2013); Fáilte Ireland, Tourism Facts 2014 (revised February 2016)

Mayo was the only county to experience a fall in overseas tourism revenue (-13.9%) despite growth in tourist numbers, indicating that average spend per visit declined.  The ageing of the large Mayo diaspora in the UK, reducing revenue from ‘visiting friends and relatives’, could be a factor.  Roscommon and Sligo also saw a decline in spend per visit.  The substantial reduction in average hotel prices during this period would have contributed and this may have been more prevalent in these counties.

Domestic tourist revenue and numbers in western counties

Domestic tourism plays a key role in the region.  In 2016 Galway received over 1 million domestic trips with Mayo and Clare next highest (Table 1). Given low numbers, data for some counties is amalgamated in the published data and Roscommon & Longford received 136,000 domestic trips in 2016, the lowest number in Ireland.  The revenue generated from domestic trips ranged from €17.5m in Roscommon & Longford to €193.9m in Galway.

In terms of the average expenditure per trip, counties Clare and Donegal generate notably higher spending per domestic trip.  This might be because domestic trips to these counties tend to be for a longer duration and/or people engage in more activities (are holidaymakers).  The more inland areas (Roscommon & Longford and Leitrim & Cavan) have lower average spend per trip which could be because stays in these areas tend to be shorter, are more commonly to visit friends or family and/or costs are lower.  Galway’s relatively low spend per trip is likely influenced by short ‘city-breaks’.

Table 1: Number of domestic trips and revenue in Western Region and state, 2011 and 2016

Source: Fáilte Ireland, Regional tourism performance in 2016 (revised March 2018); Fáilte Ireland, Tourism Facts 2016 (August 2017); Fáilte Ireland, Regional tourism performance in 2014 (February 2016); Fáilte Ireland, Tourism Facts 2014 (revised February 2016

Change in domestic tourist revenue and numbers

As economic conditions improved and disposable income recovered, the number of domestic trips taken in the state grew by 30.5% between 2011 and 2016 with the revenue generated by such trips increasing by 27%, indicating some reduction in spend per trip (Fig. 3).  Except for Mayo, all western counties had the opposite pattern, with greater revenue growth than growth in domestic trips with higher spend per trip.  Clare, Leitrim & Cavan and Sligo in particular had notably higher revenue than numbers growth.

Roscommon & Longford had the strongest growth in both numbers and revenue, though from a very low base.  This growth was far stronger than the performance of overseas tourism over the same period in Roscommon[4] meaning Irish tourists now play a larger role in Roscommon’s tourism activity.

Galway and Mayo had the next strongest growth in tourist numbers influenced by Wild Atlantic Way marketing, initiatives such as the Mayo Greenway and the popularity of Galway City and Westport in particular for short breaks.  For Mayo, domestic trips out-performed overseas, again indicating an increased role for the Irish market, while Mayo’s lower revenue growth is consistent with the pattern for overseas tourists where spending per visit also declined.

Fig. 3: Percentage change in domestic tourism revenue and tourist numbers in Western Region and state, 2011-2016

Source: Fáilte Ireland, Regional tourism performance in 2016 (revised March 2018); Fáilte Ireland, Tourism Facts 2016 (August 2017); Fáilte Ireland, Regional tourism performance in 2014 (February 2016); Fáilte Ireland, Tourism Facts 2014 (revised February 2016)

Key Policy Issues

Tourism marketing brands are critical to attracting domestic and overseas visitors: The Wild Atlantic Way brand has increased tourist numbers and hospitality employment in counties along its route with Donegal, Clare and Galway seeing particularly strong jobs growth.  The continuation, strengthening and extension of the WAW marketing brand is important for sustaining and growing the sector along the western seaboard.

The 2018 launch of the new Ireland’s Hidden Heartlands marketing brand is hoped to increase tourist numbers and revenue to the more inland areas of the Western Region.  While Leitrim has performed well in recent years with strong employment and visitor growth, Roscommon has performed quite poorly; both rely heavily on the UK market.  Careful monitoring of the impact of the Ireland’s Hidden Heartlands marketing will be required to judge its effectiveness, with adjustments made as needed.

Need to adapt to tourism trends: A number of trends will impact on the future of tourism in the Western Region.  For example the emergence of ‘sharing economy’ models such as Airbnb is already having an impact.  This can facilitate visitors to stay in more rural areas where there may be insufficient demand for other types of accommodation but where visitors can bring benefits to the wider economy.  This trend however may also impact on the employment levels of accommodation providers.

Changing demographics such as the ageing profile of the European market as well as the UK and US based Irish diaspora, alongside strong global tourism growth from Asian markets, will alter the profile, nature and requirements of overseas tourists to the Western Region and its hospitality sector will need to adapt.

The transition to a low carbon economy will also impact on tourism with potential reduction in air travel, increased focus on the use of public transport by tourists and a demand for higher environmental standards within the sector.   The Western Region’s ‘green’ image provides an important marketing tool, however Ireland’s island location and reliance on air access means that any reduction in air travel to mitigate its negative climate impacts could have a significant impact on tourism in the region.

Pauline White

 

[1] Latest data available. While some topline county data is available for 2017, it does not include a breakdown by market.

[2] Not including revenue from Northern Ireland, carrier receipts (payments to Irish airlines/ferry companies by tourists coming into the country) or overseas same-day visits.

[3] County data is based on a three-year rolling average so the figures for a particular year represent their ‘average’ performance for the previous three years.

[4] This was also the case for Longford.

 

Galway as a Key Regional Driver

The WDC recently presented to Galway Chamber (presentation available here), noting some of the work they have recently undertaken and highlighting some policy implications for the Region as well as the city.

Galway – which Galway?!

Galway city and its reach goes well beyond the city boundary, but measuring this is complicated. In part because there are different measures depending on the role performed by the city, for example as a centre of excellence for health it has an extensive regional remit. More recently there is consideration of the Galway Metropolitan Area Spatial Plan (MASP) as part of Ireland 2040 and the National Planning Framework.

Travel to Work Areas

Another way of examining the impact and influence of Galway is examining its labour catchment. The WDC has analysed labour catchments, based on Travel to Work Areas, which in turn are based on the commuting patterns of workers resident in the Western Region. The WDC first undertook this exercise based on Census 2006 data and has completed the same analysis 10 years later with the most recent Census in 2016. This provides useful trend data, which shows a growth in the size of the Galway city labour catchment over the period. The Galway city labour catchment and the extent of commuting to the city highlights the extensive reach of the city across the entire county and beyond into parts of Galway and Mayo.

Highlights from 2016 Census

The recent Census data shows that between 2011 and 2016 the number of people living in Galway city grew by over 4% (4.2%), and by 2.4% in County Galway. Both the city and county had much higher population increases than anywhere else across the Western Region, (Mayo and Donegal recorded slight declines).

When examining the socio-economic profile of residents, the figures for Galway city are generally very similar to the state average, for example, in terms of the employment (53.4%) and unemployment rates (7.9%) and the share not economically active (38%) the Galway city figures and the State are the same.

NPF and RSES

There was a discussion on the National Planning Framework and the Northern & Western Regional Economic and Spatial Plan. While the NPF is to be a move away from ‘business as usual’, from a regional perspective the focus is on the five cities. A concern is implementation and the importance of sectoral policy as an instrument of change for both capital & current spending. Sectoral polices need to be aligned to support the move ‘away from business as usual’. However, there is little evidence of this in the NPF, so for example, policies such as the National Aviation Policy devised well before the NPF now need to be reviewed to support the regional population and employment targets.

On the Northern & Western Regional Economic and Spatial Plan, while the WDC welcomes regional population targets there needs to be more commitments to help deliver. There is much potential in the regional centres but there needs to be better links and investment, however much of this is at the back end of the programme rather than being front loaded. As we know from previous spatial planning exercises (e.g. National Spatial Strategy), implementation is key. What happens if priorities of a Government Department or sectoral agency conflict with RSES?

Policy implications for Galway

Better intra-regional transport links e.g. M18 have extended labour catchments & opened up new opportunities, for example there is now more commuting for work between Galway, Ennis, Shannon and Limerick. This can be a key asset for large employers looking to access the skills they need. The Galway-Ennis-Shannon- Limerick may currently be the most cohesive element of the Atlantic Economic Corridor and it illustrates how good transport links are critical.

Employment and good job opportunities are important in ensuring skilled people will stay in the region and Galway needs to attract new and dynamic enterprises. Employment is very important but Galway as a place to live is equally, if not more important. Place of residence is usually more stable than place of employment, therefore retaining the good quality of life available in Galway and improving on it should also be a policy priority.

Galway City and Chambers city Regions Conference

The idea of the regional cities working together more cohesively was a key theme discussed at the conference on urban development hosted by the Chambers of Commerce in the five cities – Cork, Dublin, Galway, Limerick and Waterford, held in NUI Galway on 28th March. The conference, entitled ‘Ireland’s Cities – Powerhouses of Regional Growth’, explored how Ireland’s five cities can fulfill the goals of economic development for their regions set out in the National Planning Framework (NPF) and Project Ireland 2040.

The Minster for Housing, Planning and Local Government, Eoghan Murphy TD, opened the conference and welcomed the initiative, pointing to the opportunities for urban growth and regeneration without urban sprawl. John Moran, Chair of the Land Development Agency pointed to the opportunities for the four regional cities to work together to create a counterbalance to the East and to combine capacities to create more opportunities. Other speakers included Anne Graham, CEO of the National Transport Authority.  John O’Regan, Director of AECOM discussed the results of their Survey on Our Cities’ Infrastructure Needs and Dr. Patrick Collins from NUI Galway discussed a Vision for Galway as an example of urban regeneration highlighting issues and opportunities. The presentations will be made available on the Galway Chamber website shortly.

 

Deirdre Frost

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.

Industry’s role in total ‘agency assisted’ jobs declining nationally but remains highly stable in Western Region

In a recent post I outlined some of the main findings from our analysis of Census employment data on the Industry sector in the Western Region.   Our recent report ‘Industry in the Western Region: Regional Sectoral Profile’ also examined agency assisted Industry jobs and they are the subject of this post.

Each year the Department of Business, Enterprise & Innovation (DBEI) (and formerly Forfás) conducts a survey of all firms in Ireland who have ever received assistance from IDA, EI or Udarás na Gaeltachta.  This is published as the Annual Employment Survey (AES) and these firms are referred to as ‘agency assisted’.  They are limited to Industry or International Services firms currently or with the potential to export.  For Industry this would include most enterprises.   Unlike Census data, which is based on where a person lives, AES data is based on where the company is located, so is the location of the job, even if the person travels from another county.

Agency assisted jobs in Industry in the Western Region

The latest AES data is from 2017 when there were 49,435 agency assisted Industry jobs in the Western Region.  From a low of 38,000 in 2010, assisted Industry jobs have grown steadily, accelerating since 2013.

Of total assisted Industry jobs in the region, 87.6% are Permanent Full Time (PFT) with the rest ‘Other Jobs’ (temporary, part-time or contract).  The share of PFT jobs in the region is lower than nationally (89.5%) indicating that other forms of employment are more common in the region’s industrial sector.   The share of jobs that are PFT declined over the decade from 92.2% in the state and 90% in the region in 2008 indicating a rising prevalence of other forms of employment.  Every western county, except Donegal, had a lower share of PFT assisted Industry jobs in 2017 than a decade earlier.

Industry’s share of total assisted jobs

In the Western Region, the share of total assisted jobs (Industry + International Services) accounted for by Industry has remained extremely stable at around three-quarters over the past decade (Fig. 1). This contrasts strongly with a steady decline nationally from 64.2% in 2008 to 55.6% by 2017.  International services account for a far higher and growing share of assisted jobs nationally than in the region, where Industry continues to play a greater role.

Due to confidentiality reasons, data on assisted jobs at county level is combined for Leitrim, Roscommon and Sligo.  In 2017, this is where Industry accounts for its highest share of assisted jobs (88.6%). There has been a considerable increase in Industry’s importance, partly due to substantial job losses in international services over this period.[1]  Mayo has the next highest share (87.3% in 2017) in Industry with a number of significant Irish and multinational manufacturing plants but limited international services activity.

In Galway, Industry’s share declined markedly between 2009 and 2012 but has remained relatively steady since as its growth in Industry and international services jobs has been similar (29.2% in Industry and 25.2% in international services during 2012-2017). While there has been fluctuation in the relative importance of Industry in Clare, by 2017 73% of Clare’s assisted jobs were in Industry, the same share as a decade earlier.  Industry’s role in Donegal declined throughout the period, partly due to very strong growth in international services as well as manufacturing job losses.  At 61.8% Donegal has the lowest share of Industry jobs in the region but is still above the state average.

Fig. 1: Industry as a percentage of total assisted jobs in Western Region and state, 2008-2017

Source: Department of Business, Enterprise & Innovation (2018), Annual Employment Survey 2017, special run. Note: For ease of interpretation the vertical axis starts at 50%.

Assisted jobs in Industry sub-sectors

MedTech dominates assisted Industry jobs in the Western Region (Fig. 2) accounting for 29.7% of all such jobs in the region compared with 13.3% nationally.  For the country as a whole, Agri-food is by far the largest assisted Industry sector.  As well as Agri-food, the region also has a notably lower share involved in the high-tech Chemicals & Pharma and Computer & Electronic sectors.

Fig. 2: Percentage of total assisted jobs in Industry in each sub-sector in Western Region and state, 2017

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

During 2012-2017 the region performed considerably better than nationally in the region’s three strongest growing sub-sectors (Fig. 3).  Valeo in Tuam would be a key factor in the strong growth in Transport Equipment, while recovery in the building industry drove the next highest growing sub-sectors.  In many other sub-sectors, jobs growth in the region was relatively similar to the national experience.  It did have a notably stronger performance in Clothing & Textiles while there was a decline in Mining & Quarrying jobs in the Western Region compared with growth nationally.

Fig. 3: Percentage change in assisted jobs in Industry sub-sectors in Western Region and state, 2012-2017

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

Assisted Industry jobs by ownership

Of total assisted Industry jobs in the Western Region in 2017, 55.1% (27,214) were in foreign owned companies, higher than the 45.3% share nationally.

During the early years of the recession (2008-2012), the share in foreign ownership increased substantially (from 52.7% to 55.8%) due to large job losses in predominantly Irish owned sectors supplying construction, as well as jobs recovery beginning earlier in the foreign owned sector, strongly influenced by the performance of MedTech.  While jobs growth has extended more widely in the Irish owned sector, the share jobs in foreign ownership remains at a higher level than pre-recession.  Foreign ownership is not only more important to Industry in the Western Region, but the recession further strengthened its role.

The ownership pattern differs across Industry sub-sectors.  At 96.8% of assisted jobs in foreign ownership MedTech is very heavily reliant on FDI companies with large employers such as Medtronic, Boston Scientific and Abbot.  Transport Equipment, which has shown strong jobs growth, has the next highest level of foreign ownership at 84.4%.

In terms of Irish ownership, all assisted jobs in Mining & Quarrying and practically all (98.2%) in Clothing & Textiles, is in Irish owned firms.  For Clothing & Textiles, the loss of previous foreign owned jobs in the sector e.g. Fruit of the Loom in Donegal, and the changing character of the sector to focus on high value, hand crafted products e.g. Magees of Donegal, Foxford Woollen Mills, means it is now largely an indigenous industry.  Agri-food has the next highest level of Irish ownership at 85% of assisted jobs.

Conclusion

Industry plays a considerably more significant role in agency assisted employment in the Western Region accounting for 3 in 4 of all assisted jobs.  While Industry’s share is declining nationally, it is highly stable in the region with its strong Life Sciences cluster a contributing factor.

While Industry’s share of assisted jobs has remained highly stable, there have been many changes within the sector over the past decade including a growing share of non-permanent jobs and the increased significance of foreign owned employment.

Greater diversity in the industrial profile of a region increases its resilience and capacity to withstand external shocks.  The region’s greater reliance on foreign ownership and the dominant role of Life Sciences (while a key regional asset) could increase the region’s exposure to risk.  There needs to be a strong policy focus on further embedding existing regional strengths while also developing new areas of growth e.g. Energy, Transport Equipment, advanced engineering, to further diversify the region’s industrial profile and increase its resilience.

More detailed analysis of agency assisted employment in Industry in the Western Region is provided in Section 3 of ‘Industry in the Western Region: Regional Sectoral Profile’.

Pauline White

[1] The numbers employed at the former MBNA (now Avantcard) call centre in Carrick-on-Shannon reduced substantially over this period, as well as a number of call centre closures in Sligo.

WDC Submission on Draft RSES for Southern Region

This week the WDC made a submission to the public consultation being held by the Southern Regional Assembly on their Draft Regional Spatial and Economic Strategy.  The submission is available here.

As we’ve provided substantial input previously (available here) to the preparation of the Draft RSES, in this submission we mainly comment on the specific text and content of the Draft RSES document.

County Clare is the only county within the Southern Assembly region that is also under the remit of the Western Development Commission, therefore this submission largely focuses on the questions as they pertain to County Clare.

Some of the general comments contained in our submission include:

Role of Ennis

Apart from Ennis being a key economic and residential centre, Ennis is the county capital and link to rural parts of County Clare. This role is clearly evident in the extent of the Ennis labour catchment which extends across much of the County, with the exception of the Kilrush labour catchment to the south west of the county and the Shannon labour catchment to the south, see Travel to Work and Labour Catchments in the Western Region (WDC 2018) here. This role should be maintained and harnessed to support the growth and development of Rural County Clare.

Our Region’s Economic Engines

Discussion of ‘achieving convergence between where people live and work’ needs to recognise the opportunity of remote working, either for people to work from home or a hub located close to their home.  It also needs to be recognised that job creation in smaller towns, villages and rural areas is another route to such convergence and pursing such convergence should not solely focus on building more houses in cities and other large urban centres.

Galway-Ennis-Shannon-Limerick (GESL) Economic Network

The Galway-Ennis-Shannon-Limerick Economic Network is actually a segment of the Atlantic Economic Corridor. It may currently be the most cohesive segment, given the proximity and strong ties between the centres, especially Limerick-Shannon and Ennis centres, with increasing economic activity between Galway, Ennis and Limerick supported by recent investments in improved transport connectivity especially the M18. This network can help support regional growth in both the Southern and Northern and Western Regions. In addition this segment of the network can point to how to improve and develop the cohesiveness of the broader Atlantic Economic Corridor.

Shannon Airport

The role of Shannon Airport needs to be further supported and enhanced. Though the National Aviation Policy (2015) does recognise the key role of Shannon Airport, the policy was developed well before the National Planning Framework which attempts to redirect growth away from ‘business as usual’.  However since then, there is ever greater concentration of international traffic at Dublin Airport. The RSES should advocate for a revised National Aviation Policy so as to fully support the regional population and employment targets. In the absence of a change in policy it is not clear how the Airports and Ports in the Southern Region can realise a stable or ideally a growing share of traffic.

 Limerick-Shannon MASP

The Limerick-Shannon MASP is different to others in that it is connecting two separate urban centres, albeit economically interdependent urban centres. As Limerick is the larger centre there is understandably much focus on it. The focus is also on connecting Limerick and Shannon Airport/Free Zone. The development and transport requirements of Shannon town itself should also be prioritised, to promote Shannon as an attractive place to live as well as work.

The full submission is available here.

Following the public consultation (which closed on 8 March) the SRA will prepare a report on issues raised in submissions/observations and recommend whether the RSES should be made with or without amendments. It may necessary to hold another phase of public consultation before the RSES can be finalised. You can check for updates on the process here.

 

Deirdre Frost