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Professional Services in the Western Region

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

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

Two publications are available:

Employment in Professional Services

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

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

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

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

Professional Services sub-sectors

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

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

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

Employment in western towns

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

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

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

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

Self-employment in Professional Services

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

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

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

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

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

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

Professional Services Enterprises

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

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

Source: CSO, Business Demography 2017, Table BRA18.

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

Key Policy Issues

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

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

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

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

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

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

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

Pauline White

 

Feature image by Robert-Owen-Wahl from Pixabay

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

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

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

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

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

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

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

The Public Administration & Defence Sector in the Western Region

The Western Development Commission (WDC) has just published the 9th in its Regional Sectoral Profile series which analyse employment in different economic sectors in the Western Region.

And this one is of particular interest to us, as it’s the sector we work in!  The report examines the Public Administration & Defence sector which includes all those working in the civil service, local authorities and state agencies, as well as Gardaí, prison officers and the defence forces.  It does not include those working in Education[1], Health & Care[2] or ‘semi-state’ companies e.g. Bus Eireann.

Two publications are available:

Employment in the Western Region

According to Census 2016, 18,858 people worked in Public Administration & Defence in the Western Region.  It plays a somewhat greater role in the region’s labour market than nationally (Fig. 1) accounting for 5.6% of total employment compared with 5.3%.

There is considerable variation across western counties and at 8.4%, Roscommon has the highest share working in Public Administration & Defence in Ireland with Leitrim (7.9%) second highest and Sligo (7.5%) fourth. Donegal is also in the top ten nationally.  North Connacht and the North West have high reliance on the public sector to sustain employment, partly due to more limited job options in the private sector.  In addition to Public Administration & Defence, Sligo and Leitrim also have the highest shares in Ireland working in Health & Care while Donegal has the highest share working in Education.

In contrast, at just 3.6% Galway City has the lowest share of its residents working in Public Administration & Defence in Ireland, with Galway County (4.6%) also in the bottom ten nationally.  Greater economic and employment diversity around Galway reduces this sector’s relative importance.

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

During 2011-2016, the Western Region experienced a 7.4% decline in the number working in Public Administration & Defence, greater than the 6.3% decline nationally.  In both cases this decline contrasted with overall jobs growth.  This period was characterised by a moratorium on recruitment in the public sector.

Every western county, except Clare (+3.9%), saw a decline over this period.  Donegal (-14.2%), Galway City (-12.5%) and Mayo (-10.1%) saw particularly large losses.  One factor would have been reduced staffing in their respective local authorities which are significant employers, as well as declines in the defence forces.

Employment in western towns

In 2016 there were 40 urban centres with a population over 1,500 in the Western Region. The relative importance of Public Administration & Defence as an employer varies across these towns (Fig. 2).  It is important to note that commuting is a particular issue when considering towns and this data refers to residents of the town.

At 11.4% (53 people) Lifford (county town of Donegal) has the highest share working in Public Administration & Defence in the region and second highest of Ireland’s 200 towns and cities (1,500+).  Lifford shows the potential jobs impact of locating the administrative centre of an area away from that area’s main economic centre both to support development in smaller towns and also to ease congestion in larger centres.

Strandhill in Co Sligo (9.4%, 75 people) and Roscommon town (9.2%, 208 people) were next highest in the region and third and fourth highest nationally. Except for Galway City and Ballina, the region’s larger (10,000+) urban centres all have around 7% working in this sector. Many host local authority head offices as well as offices of Government Departments and state agencies.  The very low share in Galway City is due to the wider range of alternative job options as well as the role of surrounding commuter towns e.g. Athenry.

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

Of the 38 towns in the region for which data is available for both 2011 and 2016,[3] 28 of them experienced a decline in the number working in Public Administration & Defence between 2011 and 2016, nine had an increase with one unchanged.  Bearna (18.5%, +5 people) and Gort (15.8%, +6 people), had the largest percentage growth possibly due to commuting to Galway City or Ennis as several of the other towns which grew are also commuter towns e.g. Strandhill, Sixmilebridge, Moycullen.  In absolute terms, Ennis (6%, +40 people) had the biggest increase in the number of residents working in the sector.

Many more towns experienced decline than growth however. Clifden had the largest decline (-49.1%, -26 people) and was also the town with the largest population decline of all western towns. Ballyhaunis, Ballybofey-Stranorlar, Castlerea and Loughrea also experienced large declines. These are all medium-sized rural towns, at some distance from larger urban centres.

Employment by gender

Overall, employment in Public Administration & Defence is quite gender balanced.  In the Western Region women account for a small majority (51.4% are women) in contrast to the state where there is a male majority (52.4% are men).  The female share has been higher in the region than nationally throughout the past two decades.

In terms of the sector’s relative importance to total male and female employment (Fig. 3), 6.2% of all working women and 5.1% of all working men in the Western Region work in Public Administration & Defence.  While the sector plays a notably more significant role in total female employment in the region than nationally (6.2% v 5.4%), its importance to male employment is the same.

In all areas the sector accounts for a greater share of all women’s jobs than men’s.  In Leitrim (9.4%), Roscommon (9.2%) and Sligo (8.9%) Public Administration & Defence plays a critical role in total female employment.  More limited options for alternative professional career opportunities, particularly in more rural areas, increases the role of Public Administration & Defence in women’s employment.

For male employment, Roscommon (7.6%) is where the sector is most important by quite some margin.  This may reflect the nature of some public sector employment in the county e.g. Castlerea prison.  Again, neighbouring Leitrim (6.6%) and Sligo (6.2%) is where it is next most important for men’s jobs, while it is least important in Galway.

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

The period 2011 to 2016 saw both male and female employment in Public Administration & Defence decline by 7.4% in the region.  For both, this was a greater decline than nationally with the difference greater among women (-7.4% in the Western Region v -5.8% in the state) than men (-7.4% v -6.7%).

Key Policy Issues

Higher reliance on public sector employment in the Western Region: Public Administration & Defence is a more significant employer in the Western Region than nationally (5.6% of total employment v 5.3%) and this is the case to an even greater degree for the two other predominantly public sectors of Health & Care and Education.  The three primarily public sectors of employment jointly account for 28% of all jobs in the Western Region (24% in the state).

This is also reflected in income earned.  Recent analysis by the CSO[4] found that 41.7% of earned income by employees living in Sligo came from Public Administration & Defence, Education and Health & Care combined, the highest share in Ireland, followed by Leitrim (37.8%) and Donegal (37.8%).  The spatial pattern is very vividly illustrated by Fig. 4.  This higher reliance means that developments, such as the moratorium on public sector recruitment, had a greater economic and employment impact in the region.

Fig. 4: Proportion of earned income from Public Administration & Defence, Education and Health & Care combined, 2016

Source: CSO, (2019), Geographical Profiles of Income in Ireland 2016, Map 6.8

 

Important role in female employment: Public Administration & Defence is a more important source of female employment in the region compared with nationally and the gap widened over the past two decades as women’s employment in the region became increasingly dependent on this sector. This is particularly true in more rural counties with 9+% of women in Leitrim, Roscommon and Sligo working in public administration.  Such employment may help maintain the viability of household income, particularly during a recession when there are large private sector job losses e.g. in construction.  Future trends in public sector employment will have a greater impact on female than male employment levels.

Providing professional career opportunities in smaller towns and more rural areas: Public Administration & Defence plays a critical role in providing professional career opportunities, including in more rural areas and smaller towns where there may be fewer alternatives.  North Connacht and the North West, which is the more rural part of the Western Region, has particularly high reliance on the sector (see Fig. 4).  More limited private sector job options increases this sector’s impact on the local economy.  While the main focus for Public Administration & Defence policy must be on the provision of quality public services, it parallel role as a provider of jobs, particularly in smaller towns and rural areas, should also be a factor in policy decisions on the location of such jobs.

Contribution to achieving regional and rural development: As was highlighted in a previous WDC study ‘Moving West’[5] the location of Public Administration & Defence employment is a key policy tool at the disposal of Government. The relocation of public sector offices and jobs from Dublin to other locations has considerable potential to both stimulate development in these areas and to ease pressures on the capital.  The Government, national and local, can therefore play a very direct role in delivering the regional development objectives of the National Planning Framework (NPF) through its location decisions.  Lessons learned from previous relocations, as well as technological developments to facilitate more dispersed work locations, can contribute to implementing such moves.

For more detailed analysis see ‘The Public Administration & Defence Sector in the Western Region: Regional Sectoral Profile’.

Pauline White

 

[1] See WDC (2019) The Education Sector in the Western Region: Regional Sectoral Profile

[2] See WDC (2018) The Health & Care Sector in the Western Region: Regional Sectoral Profile

[3] Two towns with a population above 1,500 in 2011 (Portumna and Bunbeg-Derrybeg) dropped below in 2016. Two towns (Collooney and Convoy) rose above the 1,500 threshold in 2016.  There were also town boundary changes between 2011 and 2016 for 15 of the 40 towns in the Western Region which has an impact when considering change over time. For most towns the impact was relatively minor, however there was a quite substantial change for Ballina.

[4] CSO (2019), Geographical Profiles of Income in Ireland 2016

[5] WDC (2008), Moving West: An Exploratory Study of the Social and Economic Effects of the Relocation of Public Sector Offices to Towns in the Western Region

Carbon Tax: Use of revenue to address climate action issues in rural areas

The WDC made a submission to the Department of Finance Consultation on the options for the use of revenues raised from increases in carbon tax.

A detailed consultation paper was prepared by the Tax Division of the Department of Finance which provided background information on carbon tax revenues, proposed changes in the rate of the tax and possible implication of these increases for users.  They also outlined a number of options for the use of revenues from the tax.

The ESRI has also done a number of studies on distributional effects of carbon tax and revenue recycling options and noted that the carbon tax disproportionately affects lower income households and rural households.  I hope to look at these studies in more detail in a future post.

As regular readers of the blog know, the Western Region (the area under the WDC remit) is a largely rural region which takes in some of the most remote parts of the state. Using the CSO definition 64.7% in of the population live outside of towns of 1,500 or more. Using the definition in Ireland 2040 the National Planning Framework 80% of people in Western Region live outside of towns of 10,000. Thus WDC work has a particular focus on the needs of, and opportunities for, more rural and peripheral areas.  The five most rural counties in Ireland are in the Western Region (Leitrim, Galway county, Roscommon, Donegal and Mayo, and the Western Region also has a higher share of the population living in smaller towns.

In this submission we therefore concentrated on issues for rural areas and our region.  Climate action for rural dwellers is not often discussed in policy and there is no significant body of work (internationally or nationally) on climate change and emission issues for rural areas in developed countries and yet there are important differences in energy use patterns and emissions in rural areas.  Hence, the main focus of the submission was on key climate matters for rural dwellers including energy efficiency; home heating; transport; and stimulating rural enterprise.

The WDC emphasised that a portion of the revenues from increases in carbon tax focus should focus on addressing issues for rural areas, and on actions to ensure that rural areas are in a position to benefit from a move to a low carbon economy.  There are many opportunities to do so and targeted programmes would enable rural dwellers to make a fair contribution to national goals for renewable energy and to actions to mitigate climate change.

 

You can view the submission here.

 

Helen McHenry

Financial & ICT Services in the Western Region

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

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

Two publications are available:

Employment in Financial & ICT Services in the Western Region

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

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

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

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

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

 

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

Employment in western towns

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

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

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

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

Change in employment in the Western Region and its counties

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

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

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

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

Agency Assisted Jobs in Financial & ICT Services

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

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

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

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

Ownership of Agency Assisted Jobs

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

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

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

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

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

 

Key Policy Issues

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

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

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

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

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

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

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

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

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

Pauline White

 

Image by Free Photos at Pixabay

 

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

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

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

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

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

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

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

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

[9] See www.LookWest.ie

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

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.