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Key Issues for the National Planning Framework – Submission from the WDC

The WDC  made its submission on Ireland 2040 – Our Plan: National Planning Framework   yesterday.  The Issues and Choices paper covered a wide range of topics from national planning challenges to sustainability, health, infrastructure and the role of cities and towns.  A key element of the paper considered the future in a “business as usual” scenario in which even greater growth takes place in the Dublin and Mid East region with consequent increased congestion and increasing costs for businesses and society, while other parts of the country continue to have under-utilised potential which is lost to Ireland.  The consultation paper therefore sought to explore the broad questions of alternative opportunities and ways to move away from the “business as usual” scenario.

The WDC submission considers these issues from the perspective of the Western Region, the needs of the Region, the opportunities its development presents for Ireland’s economy and society as a whole and the choices, investments and policy required to achieve regional growth and resilience.

This post highlights the key points made in the submission.  The complete, comprehensive submission on the National Planning Framework by the WDC can be read here (4.5MB PDF).  A shorter summary is available here (0.7MB PDF).

 

What should the NPF achieve?

  • The National Planning Framework (NPF) provides Ireland with an opportunity to more fully realise the potential of all of its regions to contribute to national growth and productivity. All areas of Ireland, the Capital and second tier cities, large, medium and small-sized towns, villages and open countryside, have roles to play both in the national economy and, most importantly, as locations for people to live.
  • While spatial planning strives for ideal settlement or employment patterns and transport infrastructure, in many aspects of life change is relatively slow; demographics may alter gradually over decades and generations and, given the housing boom in the early part of this century, many of our existing housing units will be in use in the very long term. If the NPF is to be effective it must focus on what is needed, given current and historical patterns and the necessity for a more balanced pattern of development.
  • To effectively support national growth it is important that there is not excessive urban concentration “Either over or under [urban] concentration … is very costly in terms of economic efficiency and national growth rates” (Vernon Henderson, 2000[1]). Thus it is essential that, through the NPF, other cities and other regions become the focus of investment and development.

Developing Cities

  • As the NPF is to be a high level Framework, in this submission the WDC does not go into detail by naming places or commenting on specific development projects, as these will be covered by the forthcoming Regional Spatial and Economic Strategies (RSES). The exception to this, however, is in relation to the need for cities to counterbalance Dublin.  In this case we emphasise the role of Galway and the potential for Sligo to be developed as the key growth centre for the North West.
  • The North West is a large rural region and Sligo is the best located large urban centre to support development throughout much of the North West region. With effective linkages to other urban centres throughout the region and improved connectivity, along with support from regional and national stakeholders, Sligo can become a more effective regional driver, supporting a greater share of population, economic and employment growth in Sligo itself and the wider North West region.

Developing Towns

  • While the NPF is to be a high level document and the focus is largely on cities it is important not to assume that development of key cities will constitute regional development. All areas need to be the focus of definite policy, and the NPF should make this clear.
  • While cities may drive regional development, other towns, at a smaller scale, can be equally important to their region. Recognising this is not the same as accepting that all towns need the same level of connection and services.  It is more important to understand that the context of each town differs, in terms of distance and connectivity to other towns and to the cities, the size of the hinterland it serves and its physical area as well as population.  Therefore their infrastructure and service needs differ.
  • Towns play a central role in Ireland’s settlement hierarchy. While much of the emphasis in the NPF Issues and Choices paper is on cities and their role, for a large proportion of Ireland’s population small and medium-sized towns act as their key service centre for education, retail, recreation, primary health and social activities.  Even within the hinterlands of the large cities, people access many of their daily services in smaller centres.  The NPF needs to be clear on the role it sees for towns in effective regional development.

Rural Areas

  • Rural areas provide key resources essential to our economy and society. They are the location of our natural resources and also most of our environmental, biodiversity and landscape assets.  They are places of residence and employment, as well as places of amenity, recreation and refuge.
  • They are already supporting national economic growth, climate action objectives and local communities, albeit at a smaller scale than towns and cities. But a greater focus on developing rural regions would increase the contribution to our economy and society made by rural areas.
  • The key solution to maintaining rural populations is the availability of employment. It is important that the NPF is truly focused on creating opportunities for the people who live in the regions, whether in cities, towns or rural areas.

Employment and Enterprise

  • In the Issues and Choices paper a narrow definition of ‘job’, ‘work’ and ‘employer’ as a full-time permanent employee travelling every day to a specific work location seems to be assumed. This does not recognise either the current reality of ‘work’ or the likely changes to 2040. Self-employment, the ‘gig’ or ‘sharing’ economy, contract work, freelancing, e-Working, multiple income streams, online business are all trends that are redefining the conceptions of work, enterprise and their physical location.
  • If the NPF mainly equates ‘employer’ with a large IT services or high-tech manufacturing company, many of which (though by no means all) are attracted to larger cities, then it will only address the needs of a small proportion of the State’s population and labour force.
  • Similarly the NPF must recognise the need to enable and support the diversification of the Irish economy and enterprise base. It must provide a support framework for indigenous business growth across all regions and particularly in sectors where regions have comparative advantage.

Location Decisions

  • While job opportunities are a critical factor in people’s decision of where to live, they are by no means the only factor. Many other personal and social factors influence this decision such as closeness to family (including for childcare and elder care reasons), affordability, social and lifestyle preferences, connection to place and community.
  • Many people have selected to live in one location but commute to work elsewhere or, in some cases, e-Work for a number of days a week. The NPF needs to recognise the complexity of reasons for people’s location decisions in planning for the development of settlements.

Infrastructure

  • New infrastructure can be transformative (the increase in motorway infrastructure in recent decades shows how some change happens relatively quickly). Therefore it is essential that we carefully consider where we place new investments.  To do so, capital appraisal and evaluation methods determining the costs and benefits of different investment projects need to be re-examined if we are to move from a ‘business as usual’ approach.
  • Investment in infrastructure can strongly influence the location of other infrastructure with a detrimental impact on unserved locations. The North West of the country is at a disadvantage compared to other regions with regard to motorway access. This situation will be compounded if investment in rail is focused on those routes with better road access (motorways) in order for rail to stay competitive, or if communications or electricity networks are developed along existing motorway or rail corridors.
  • The WDC believes that the regional cities can be developed more and have untapped potential, however better intra-regional linkages are needed. The weaker links between the regional centres – notably Cork to Limerick and north of Galway through to Sligo and on to Letterkenny, are likely to be a factor in the relatively slower growth of regional centres in contrast to the motorway network, most of which serves Dublin from the regions.

Climate Change

For the future, the need to move to a low carbon, fossil fuel free economy is essential and needs to be an integral and much more explicit part of the NPF.  The National Mitigation Plan for Climate Change is currently being developed, and it is essential that actions under the NPF will be in line with, and support, the actions in the Mitigation Plan.

How should the NPF be implemented?

  • While much of the role of the NPF is strategic vision and coordination of decision-making, in order for the Framework to be effective it is essential that the achievement of the vision and the actions essential to it are appropriately resourced. The Issues and Choices paper does not give a detailed outline of how the NPF implementation will be resourced, except through the anticipated alignment with the Capital Investment Programme.
  • It should be remembered that policy on services and regional development is not just implemented through capital spending but also though current spending and through policy decisions with spatial implications (such as those relating to the location of services). Therefore it is essential that other spending, investment and policy decisions are in line with the NPF rather than operating counter to it.
  • While the NPF is to provide a high level Framework for development in Ireland to 2040, it seems this Framework is to be implemented at a regional level through the RSES. The Framework and the Strategies are therefore interlinked yet the respective roles of the NPF and the RSES are not explicit and so it is not evident which areas of development will be influenced by the NPF and which by the RSES.
  • In order to ensure that the NPF is implemented effectively it is important that there is a single body with responsibility for its delivery and that there is a designated budget to help achieve its implementation.

 

It is expected that a draft National Planning Framework document will be published for consultation in May.  Following that a final version of the Framework will be prepared for discussion and consideration by Dáil Éireann.

 

As mentioned above the full WDC submission on the Issues and Choices paper Ireland 2040 Our Plan- A National Planning Framework is available here (PDF 4.5MB) and a summary of key point and responses to consultation questions is available here (PDF 0.7MB).

 

 

Helen McHenry

[1] http://www.nber.org/papers/w7503

New WDC Publication: WDC Policy Briefing No.7 e-Working in the Western Region: A Review of the Evidence

The Western Development Commission (WDC) has published its latest Policy Briefing WDC Policy Briefing No.7 e-Working in the Western Region: A Review of the Evidence, which is now available for download at the following link here.

e-Work is a method of working using information and communication technology in which the work is not bound to any particular location. Traditionally this has been understood as working remotely from the office, usually from home, whether full-time or for a period during the working week. e-Working can provide particular opportunities in regions like the Western Region where many are living some distance from key employment centres.

The WDC Policy Briefing, which includes case studies from companies and individuals, examines:

  • The extent of e-Working.
  • The way in which weaker broadband access in more rural locations impacts on the rate of e-Working.
  • Factors driving e-Work.
  • Recommendations on how e-Working can be further promoted.

This Policy Briefing shows that e-Working is a widespread practice but somewhat hidden from official statistics. It also shows that while there is demand for greater e-working, broadband speeds need to be improved.

The WDC Policy Briefing contains recommendations to support more e-Working, including priority rollout of the National Broadband Plan to those counties with the lowest broadband speeds. Additional case studies are also available for download from here.

Deirdre Frost

How is the Western Region doing?

On 31 January, the WDC was invited to give a presentation to officials of the Department of Social Protection working across the Western Region. The objective was to give an overview of the WDC’s analysis of data across a range of socio-economic issues.

Analysing regional data provides information on the areas for which we are responsible and highlights the multi-dimensional nature of the concept of regional development.  A regional perspective is necessary since changes and inequalities not only occur among individuals but also the places where they live

This (very) comprehensive presentation analyses the following indicators:

  1. Population: Preliminary Census 2016 Results
  2. Labour Market: QNHS Q1 2016, special run
  3. Income: County Incomes & Regional GDP, 2013-2014
  4. Enterprise: Business Demography, 2014

These are some of the key points emerging from the analysis.

Population

  • Population of Western Region grew +0.9% 2011-2016 compared with +3.7% growth nationally.
  • Three counties in the Western Region showed population decline 2011-2016 –(Donegal -1.5%, Mayo -0.2% and Sligo -0.1%) – only counties in Ireland to do so. In addition Leitrim and Roscommon had the lowest growth.  Galway city had 5th highest population growth in Ireland.
  • Every county in Ireland had a positive natural increase (more births than deaths) during 2011-2016. Donegal, Sligo and Mayo however had enough negative net migration to lead to population decline.
  • All western counties, and all but six areas nationally, had negative net migration between 2011 and 2016. Donegal and Sligo had the two highest rates of negative net migration.
  • Male out-migration considerably higher than female leading to a +1.5% increase in the female population of the Western Region and only +2% growth in the male population.
Figure 1: Percentage change in population by administrative area, 2011-2016. CSO (2016), Preliminary Results Census 2016

Figure 1: Percentage change in population by administrative area, 2011-2016. CSO (2016), Preliminary Results Census 2016

Labour Market

  • The Western Region’s labour force declined marginally (-1.2%) between 2007 and 2016. Within this the male labour force fell by -6.1% while the female rose by +5.7%.
  • The Western Region has a lower share of its labour force aged under 35 years and a higher share aged over 44 Its labour force participation rate is lower for both men and women, and across all age groups (except 65+).
  • Total employment in the region fell by -5.8% 2007-2016 compared with a -6.5% decline in the rest of the state (all counties outside Western Region)
  • There has been exceptionally strong growth in self-employment in the Western Region since 2012, increasing by +31.1% in the region compared with +7.2% in the rest of the state.
  • Growth of self-employment tied to sectoral pattern of growth with strongest jobs growth since 2012 in Agriculture, Construction, Accommodation & Food Service and Wholesale & Retail, all with high self-emp
  • Since 2012 the Western Region has had jobs decline in 7 out of 14 sectors, in the rest of the state there was only decline in 1 out of 14. Jobs recovery in the Western Region is not as diversified across the economy as elsewhere and more concentrated in domestic sectors
  • Unemployment numbers declining steadily in region, but share of long-term unemployment growing. Western Region has higher unemployment rate in all age groups (except 65+ & 25-34) and particularly among youth.
Figure 2: % change in employment by sector in Western Region and Rest of State, 2012-2016. CSO, Quarterly National Household Survey, Q1 2012-2016, special run

Figure 2: % change in employment by sector in Western Region and Rest of State, 2012-2016. CSO, Quarterly National Household Survey, Q1 2012-2016, special run

Income

  • Disposable income per person in the Western Region was €17,260 in 2013 (92.3% of State). Provisional 2014 figures show some growth (€17,768) but still well below the 2008 peak (€21,167).
  • Longer term, the gap is narrowing, the Western Region had disposable income of 84.3% of State in 1995, 92.3% of State in 2013.
  • Within the Western Region, Roscommon had a significantly lower income relative to the State in 2014 (87.2%) compared with 2005 (95.8%). Clare has also fallen relative to the State starting at 95.5% in 2005 and dropping to 93.3% in 2014. Sligo, Galway, Mayo and Donegal have all improved their position relative to the State since 2005, albeit with some variation. Galway and Sligo had greatest improvements.
Figure 3: Index of disposable income per person in western counties, 2005-2014 (Index State=100). CSO, County Incomes and Regional GDP 2013, provisional 2014

Figure 3: Index of disposable income per person in western counties, 2005-2014 (Index State=100). CSO, County Incomes and Regional GDP 2013, provisional 2014

Gross Value Added

  • Dublin region is the only region where the preliminary 2014 GVA per person figure is higher than the peak GVA per person in 2007. None of the other regions have recovered to the 2007 level, though the difference in the West region is slight.
  • Dublin and Mid-East and South West, only regions with a greater share of national GVA than share of persons at work.
  • In 2005 there were 60.6 index points between the lowest GVA per person in a region (Midland, 65.4) and the highest (Dublin and the Mid-East, 126.0).  In 2014 the difference between Midland (59.2) and Dublin and the Mid-East, (130.6) was 71.4 index points (71.3 in 2013).
Figure 4: Index of GVA per person by region, 2005-2014 (Index State=100). CSO, County Incomes and Regional GDP 2013, provisional 2014

Figure 4: Index of GVA per person by region, 2005-2014 (Index State=100). CSO, County Incomes and Regional GDP 2013, provisional 2014

Enterprise

  • The share of enterprises nationally that are based in the Western Region is declining and was 17.1% of the total in 2014.
  • Construction, Wholesale & Retail, Professional activities and Accommodation & Food Service are the largest enterprise sectors in the region. Less than 5% of the region’s enterprises are in Financial & Insurance and Information & Communications combined.
  • There has been a far greater decline in enterprise numbers in the Western Region than the rest of the state since 2008 and the region had a weaker performance – greater decline or lower growth – in every sector (ex. real estate).
  • The enterprise base differs across more urban and rural counties. Highly rural counties of Roscommon, Mayo and Donegal have 34-36% of enterprises in Industry and Construction but in more urban counties of Clare and Sligo it is around 30%.  A higher share of enterprises in Galway and Sligo are active in knowledge services sectors, though even Galway is below national average. Local services play a larger role in more rural counties.
  • Western counties had among the greatest losses of enterprises since 2008. Donegal lost more than 1 in 3 of its Construction firms; Wholesale & Retail declined most strongly in Donegal and Clare; Accommodation & Food Service declined across most counties.
  • Knowledge services performed best, though from a low base.
Figure 5: % change in number of active enterprises by sector in Western Region & Rest of State, 2008-2014. CSO, Business Demography, 2014

Figure 5: % change in number of active enterprises by sector in Western Region & Rest of State, 2008-2014. CSO, Business Demography, 2014

The full presentation can be downloaded here  (PDF, 2MB)

 

Pauline White & Helen McHenry

Future Work – What will work and workers be like in the future?

A conference on the Future of Work, on 29th November, organised by the Sunday Business Post highlighted the trends and influences which are likely to impact on the types of jobs that will be in demand in the future.

In his keynote address, Ade McCormack, former technologist and Financial Times columnist explained why work will be quite a different experience for our children. He tracks human development and work from Stone Age man to now and suggests that we are moving from the Information age into the Biological age. This will include moving from a stage of using and wearing technology to possibly have technology embedded in us. He also suggests that as many as 50% of jobs in the future will be done by robots and humans will need to develop their creative potential rather than engage in mundane tasks which will be done increasingly by robots.

He also notes that the digital economy is driving fundamental power shifts including: from the employer to the employee, from the seller to the buyer and from the government to the citizen.

In his presentation on How to future proof your workplace? Peter Cosgrove, Director, CPL and Founder of the Future of Work Institute, Ireland, highlighted some key issues and trends which will impact on employment including;

  • The impact of technology on all businesses and how technology is affecting recruitment methods with social media an increasingly important aspect.
  • How businesses are being affected by a global marketplace, flexible working and adapting to the new generation of workers. Work in the future will not be a place to go to, but a thing to do!
  • The importance of talent, innovation and how gender diversity will become increasingly important
  • The employer brand is important and employers will need to adapt to ensure they attract future talent in a talent scarce marketplace.

Fiona Mullen, the HR Director at Facebook discussed How companies can provide outstanding workplaces which are enablers for productivity, creativity and innovation. Fiona provided an interesting account of the Facebook story and the values of being ‘bold’ in a brave and innovative way and open to its staff and customers. The company tries to avoid being hierarchical and engages with staff in building trust and a common purpose. The company motto is ‘This Journey is 1% Finished’, illustrating its ongoing ambition.

 Annette Burns, Director of  eumom  highlighted the growing importance of women in the workforce. She noted that Western economies are facing a skills crisis where a birth rate of 2.1 is needed just to keep standing still; yet every year thousands of skilled women leave the workforce. In Ireland alone, over 3000 fulltime women leave every year. In the US 3 million professional women are keen to re-enter the workplace. eumom, has researched the issues and has identified what limits women’s participation and what are the enablers to contributing now and in the future.

Professor Anthony Staines, DCU discussed how changing skills requirements alter education priorities for individuals and policy-makers across the stages of formal education? In particular he examines the focus on STEM (Science, Technology, Engineering and Maths) subjects and suggests that while this is important there is a need to focus on other skills also. He notes that in comparison to other countries we do have a well-educated workforce, though there are some issues with early school leaving and the youth who disengage from formal education. He noted that our education system is getting better at supporting lifelong learning but the main beneficiaries are those who are already well educated and have done well out of the education system. He suggests that in terms of educational outcomes Ireland is good at equality but not equity. He welcomed the developments undertaken by SOLAS in expanding and modernising the apprentice system in Ireland and suggests that employers should increasingly try to employ apprentices rather than the traditional focus on graduates. He also noted that while technology is solving a lot of problems there are some persistent problems that need much attention such as

  • Persistent poverty
  • Climate change
  • Migration
  • Controlling corporations

Mark Coleman, Research Director at Gartner discussed the issue of Competing for Top Talent. Though most CIOs believe there is a talent crisis, they engage in surprisingly little talent innovation. In particular, they should consider new approaches to acquiring and keeping top talent. To compete in this arena, CIOs must borrow the mindset, tools and technologies of branding and marketing. Seeing talent as a customer, and employment by IT as a brand promise fulfilled, will improve talent acquisition and retention.

In her Ministerial Address: Mary Mitchell O’Connor, T.D, Minister for Jobs, Enterprise & innovation noted the new jobs announcements she had made that morning in pharmaceuticals and communications and that they were likely to be an important feature of the economy in the future. She highlighted the new data on unemployment which is now at the lowest rate in many years and the importance of continuing to ensure that all have an opportunity to enter the workforce. The Minister noted the role of the Regional Action Plans for Jobs and the new Regional Skills Fora as an important initiative designed to bring employers and educationalists together to ensure skills gaps are overcome.

Professor Cathal O’Donoghue, Director, Rural Economy and Development Programme, Teagasc discussed The Future of Work in the regional economies of Ireland. He showed how the recent recession and economic recovery has affected different parts of Ireland in different ways, which has resulted in diverging labour markets. He discussed recent drivers in relation to regional economic growth, demographic and labour market changes. The Commission for the Economic Development of Rural Areas outlined a strategy to both increase employment in the short term and to move employment up the value chain in the medium term.

Kevin Empey, Director, Willis Towers Watson discussed how advances in technology are redefining employer/employee relationships. He explored what is changing in the employer / employee landscape and how organisations can prepare for a rapidly changing workforce and workplace. He discussed how demographic and technology trends are converging to transform working environments globally as well as the implications for Business Leaders, for HR and for employees.

The conference concluded with an interesting Panel Discussion on The ‘Gig’ economy and What it means for work in the future? This on-demand, or so called ‘gig’ economy is creating exciting economies and unleashing innovation. But there are important hard questions about workforce protections and what a ‘good’ job will look like in the future.

 

Deirdre Frost

Self-employment increases by 10,000 in Western Region

The biggest change in the Western Region’s labour market over the past year has been an exceptionally rapid expansion in self-employment.  According to a special run of the CSO’s Quarterly National Household Survey for Quarter 1 2016 for the Western Region, between Quarter 1 2015 and Quarter 1 2016 the number of people in the Western Region who are self-employed grew by 15.4%. That was an increase of 10,000 people, from 65,000 up to 75,000.  This was in sharp contrast to the change in the number of people who were working as employees in the region, which actually declined marginally over the same period -0.2% (from 249,600 down to 249,200).

There has been a steady upward trend in the numbers self-employed in the region since 2012, but 2016 was marked by an exceptionally large rise (Fig. 1). From Fig. 1 it can be seen that the number of self-employed who are employing others actually declined between 2012 and 2014 but has grown strongly since.  Indeed between 2015 and 2016 this type of self-employment increased by a quarter (up 25%).  The strong growth in the number with employees is a very positive indication of the growth potential of some of these businesses. Currently there are 19,000 people self-employed and employing others in the Western Region.

Self-employed with no paid employees is by far the more common type of self-employment however.  This has grown in each year since 2012, except 2015, and increased by 12.4% in the past year to now stand at 56,000. This type of self-employment plays a key role in ensuring that people can continue to live and work in smaller towns and rural areas.

Fig. 1: Number of self-employed persons in the Western Region, with and without paid employees, Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

Fig. 1: Number of self-employed persons in the Western Region, with and without paid employees, Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

The growth in self-employment was the sole driver of any jobs growth that took place in the Western Region in this period.  The total number of people at work in the region rose by 3.5% between Q1 2015 and Q1 2016 and this was entirely due to self-employment.

Contrast to situation in rest of the state

The massive growth in self-employment between 2015 and 2016 was unique to the Western Region.  For the rest of the state (all other counties in Ireland combined) the number of self-employed people actually fell during this period by -1.3%, it was the same for those with and without employees.  The number of people working as employees grew however (up 2.8%) in contrast to the decline experienced in the Western Region.

Total jobs growth in the rest of the state was lower than that in the region (2.2% v 3.5%) over the period and the region’s stronger overall performance was caused by people creating their own jobs. While the region had stronger jobs growth during 2015-2016, over the longer period since 2012 the region has had lower growth.  The total number in employment rose by 6.4% in the Western Region between 2012 and 2016, but by 8.7% in the rest of the state.

High share of all jobs are in self-employment

The Western Region’s labour market differs markedly from that elsewhere.  The recent growth in self-employment in the region has further reinforced its key role.  22.9% of people at work in the Western Region work for themselves, while in the rest of the state it is 15.2% (Fig. 2).

In the rest of the state the share of self-employed has not fluctuated a great deal over the past decade.  There was only a 1.5 percentage point difference between the highest and lowest years.  In the Western Region, volatility has been far greater with a 4.3 percentage point difference between the highest (2016) and lowest (2012) years.  It is notable that the share now in 2016 is even higher than it was in 2007 or 2008 when self-employment in the construction sector would have been at its highest.

Fig. 2: Total self-employment as a percentage of total number in employment in Western Region and rest of state, Q1 2007 – Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

Fig. 2: Total self-employment as a percentage of total number in employment in Western Region and rest of state, Q1 2007 – Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

Reasons for growth

The underlying factors driving strong self-employment growth in the region are varied and complex.  The relative lack of more standard forms of job opportunities, especially in smaller towns and more rural areas can mean that in order to remain living in these areas people need to choose the option of self-employment.  General trends in the world of work such as the growth of the so-called ‘gig economy’, contract working and trends to outsourcing of certain services and activities by larger companies (e.g. transport) is also driving growth in self-employment, though whether such trends would manifest themselves more strongly in the Western Region is unclear.

The other key explanation for the growth in self-employment, while employee numbers fell, was the sectoral pattern of jobs growth during this period.  At a sectoral level the strongest jobs growth by far was in accommodation & food service, perhaps partly influenced by the Wild Atlantic Way tourism initiative as well as increasing domestic demand, followed by transportation & storage and construction (Fig. 3) all of which are sectors that show high levels of self-employment.

Fig. 3: Percentage change in number in employment by sector in Western Region, Q1 2015 - Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

Fig. 3: Percentage change in number in employment by sector in Western Region, Q1 2015 – Q1 2016. Source: CSO, Quarterly National Household Survey, Q1 2016, special run

The 2014 Business Demography data showed that in the Western Region 88.8% of those working in accommodation & food service enterprises were employees with the remainder (11.2%) either owners or relatives.  In the rest of the state only 6.5% were owners/relatives showing greater self-employment in this sector in the region.  For transport the share of owners/relatives was 33.7% in the region compared with 21.5% in the rest of the state while for construction the difference was 43.4% in the region compared with 30.1% elsewhere. The three sectors with the strongest jobs growth in the Western Region between 2015 and 2016 all exhibit a far greater extent of self-employment in the region.

In contrast, industry, the sector which has the highest share of employees (96%) and therefore the lowest share of self-employment (4%), actually had jobs decline in the Western Region between 2015 and 2016.  The predominantly public service sectors of education, health and public administration, which would have low shares of self-employment, also reduced employment over the past year.

Conclusion

Increasingly, jobs growth in the Western Region is driven by self-employment and far more so than in the rest of the state.  This has significant implications for how jobs growth in the region is being, and can be, supported and encouraged.  It shows the importance of supports for the self-employed including issues around social protection, enterprise supports especially soft supports as many may be in locally trading sectors not eligible for grant aid, work space, broadband access and opportunities for networking.  The growth in the number of self-employed with employees is very positive and shows the potential contribution of the self-employed to jobs growth.  It also shows the importance of making it as easy as possible for the self-employed to begin hiring employees as well as the provision of information and advice on employment law and employee rights.

At the same time, these figures raise concerns about the capacity of job creation in other types of businesses, as the number of employees actually declined in the past year in the region while growing elsewhere. This seems to have been due to employment in the predominantly public sectors of education and health (significant employers) falling in the region, while growing in the rest of the state.  Jobs in industry and information & communications also declined.  We will return to the topic of 2016’s sectoral employment performance in a future post, but for now it is important to note that in the Western Region those sectors driven by self-employment are strongly out-performing the others.

Pauline White

Jobs Growth Continues but Slowing in BMW regions

The latest CSO Quarterly National Household Survey was released yesterday. This data refers to the period Quarter 2 (April-June) 2016.

The overall picture is quite positive with the number of people at work increasing by 2.9% in the past year (Q2 2015–Q2 2016).  This is almost identical to employment growth in the previous year, 3% between Q2 2014 and Q2 2015.  There seems to be a steady continuation of jobs growth nationally.

Regional patterns of employment growth

As with all national data, if you drill down to regional level you find some interesting differences.  Fig. 1 shows employment growth in each of the eight NUTS3 Irish regions over the past two years. In the most recent year (Q2 2015-Q2 2016) regional employment growth ranged from 4.3% in Dublin to just 0.5% in the Midland region.  While Dublin, the Mid-East, South East and Mid-West all had higher growth than the national average, employment in the Midland, South-West and West regions increased by under 1%.

Fig. 1: Percentage change in number of people in employment by NUTS3 region, Q2 2014–Q2 2015 and Q2 2015–Q2 2016. Source: CSO, Quarterly National Household Survey, Q2 2016

Fig. 1: Percentage change in number of people in employment by NUTS3 region, Q2 2014-Q2 2015 and Q2 2015-Q2 2016. Source: CSO, Quarterly National Household Survey, Q2 2016

Compared with a year previously (Q2 2014-Q2 2015), Dublin, the Mid-East and Mid-West experienced higher growth; in all other regions it was lower. The Greater Dublin Area (Dublin and Mid-East) in particular experienced far greater jobs growth from 2015 to 2016 than it had the previous year.  The Border and South-West meanwhile had very substantially lower growth.

When examining statistics at a smaller scale of course, they are more prone to fluctuation across years e.g. a major factory closure or opening in a year can strongly influence growth/decline in a region. However, there does seem to be a general pattern of some slow-down in jobs growth in the Border, Midland and West (BMW) region, as well as the South-West, over the past year.

Regional unemployment rates

In Q2 2016, unemployment rates ranged from 10.8% in the South East to 6.9% in the neighbouring Mid-East (Fig. 2). The three BMW regions also had unemployment rates above the national average.

Fig. 2: ILO unemployment rate in NUTS3 regions, Q2 2016 (not seasonally adjusted). Source: CSO, Quarterly National Household Survey, Q2 2016

Fig. 2: ILO unemployment rate in NUTS3 regions, Q2 2016 (not seasonally adjusted). Source: CSO, Quarterly National Household Survey, Q2 2016

Tracking unemployment rates since 2007 (Fig. 3) it is clear that the South East and Midland regions have consistently shown the highest unemployment rates, though they are following the general pattern of decline since 2012.  The Mid-east, Mid-West and South West showed the steepest declines in their unemployment rates over the past year.  The first two also had strong employment growth (see Fig. 1 above).

Fig. 3: ILO unemployment rates in NUTS3 regions, Q2 2007 – Q2 2016 (not seasonally adjusted). Source: CSO, Quarterly National Household Survey, Q2 2016

Fig. 3: ILO unemployment rates in NUTS3 regions, Q2 2007 – Q2 2016 (not seasonally adjusted). Source: CSO, Quarterly National Household Survey, Q2 2016

Decline in numbers in unemployment

The Border and Dublin regions showed practically no change in their unemployment rates between 2015 and 2016 (see Fig. 3 above). The reason for this is clear from Fig. 4. Dublin was the only region that actually experienced an increase in the number of people unemployed.  The very strong growth in Dublin’s labour force over the past year (4.4%) led to both strong growth in the numbers at work and also increased unemployment.

The Border had the smallest decline in the number of unemployed.  This compares with a very substantial fall the previous year. These two regions, plus the West, were the only ones with a smaller improvement in unemployment in this period than the previous.

There were large unemployment declines in the South West, Mid-West and Mid-East reflected in their sharply declining unemployment rates (see Fig. 3 above).  Apart from the first, these regions also showed strong employment increases (see Fig. 1 above) indicating that a significant cause of the fall in unemployment was likely movement into employment.  In the case of the South West however, it had relatively low employment growth ( see Fig. 1 above). This region had the largest fall in the size of its labour force in this period (-1.9%), so an important factor in its unemployment decline was likely unemployed people leaving the labour force (e.g. moving out of the region, retiring, returning to education).

Fig. 4: Percentage change in number of people unemployed by NUTS3 region, Q2 2014–Q2 2015 and Q2 2015–Q2 2016. Source: CSO, Quarterly National Household Survey, Q2 2016

Fig. 4: Percentage change in number of people unemployed by NUTS3 region, Q2 2014–Q2 2015 and Q2 2015–Q2 2016. Source: CSO, Quarterly National Household Survey, Q2 2016

Conclusion

The latest QNHS figures show a continuing positive labour market trend nationally and regionally. There are indications however of some slowing down of employment growth in the BMW regions as well as relatively lower falls in unemployment compared with some other areas of the country.   This is reflected in persistently higher unemployment rates in the Midland, Border and West regions, as well as the South East. The Greater Dublin Area (Dublin and Mid-East) has shown particularly strong jobs growth in the past year, though Dublin’s expanding labour force has meant that this jobs growth has not led to declining unemployment.

The regional data shows that Ireland has a complex labour market with many factors influencing regions’ performance.  When the full Census 2016 results are published next year, it will be possible to drill down to a far smaller spatial scale to examine labour market patterns within these NUTS3 regions and the different experiences of rural areas, small towns and villages, large urban centres and the cities.

Pauline White

Impact of Sectors on Western Region’s Jobs Recovery

Our last blog post examined the role that sectors play in regional GVA. Sectors also have a huge impact on the pattern of jobs growth.  Following on from our April WDC Insights publication ‘Jobs Recovery in the Western Region’, the WDC has just published new analysis examining the role that sectors have played in recent jobs trends.

‘Impact of Sectors on Western Region’s Jobs Recovery’ examines some of the causes for the region’s slower jobs recovery.

Lower jobs diversity

There is greater concentration of employment in a few sectors in the Western Region.  62.2% of jobs in the region are in its top five sectors (Industry, Health, Wholesale & Retail, Agriculture and Education) compared with 53.6% in the rest of the state.  Greater diversity in employment across sectors is an important aspect of regional resilience and growth.

Traditional and public sectors more important; services less so

The region has higher shares working in the traditional sectors (Agriculture, Construction, Industry) and also Public Services (Health, Education, Public Admin) than in the rest of the state (Fig. 1).

Fig. 1: Percentage of employment by broad sector, Western Region and Rest of State, Q1 2015

Fig. 1: Percentage of employment by broad sector, Western Region and Rest of State, Q1 2015

At the same time, there are lower shares employed in Locally Traded (Retail, Accommodation, Transport) and Knowledge (ICT, Finance, Professional) Services.  For Locally Traded Services, as these rely on domestic demand, lower incomes in the region  compared with much of the rest of the state may be a factor in this.  It also helps to explain the region’s higher youth unemployment as these are areas (shops, bars) where young people often find work.

The high-value Knowledge Services sectors is where the region lags the rest of the state most significantly.  These are seen as key sectors for growth and their poor performance is a cause for concern.

Strength in manufacturing

Manufacturing plays a more important role in the region’s employment, accounting for 15.6% of jobs compared with 12.2% in the rest of the state.  Between 2012 and 2015 growth in manufacturing jobs in the Western Region was more than twice that as in rest of state – 8.3% v 3.4% (Fig. 2).  The region’s manufacturing strength has been a key factor in the West’s relatively strong recovery in GVA.  Manufacturing is a key regional strength.

Decline in market services sectors

Between 2012 and 2015 there was jobs decline in the three market services sectors (Administration and Other, Locally Traded and Knowledge) in the Western Region, while they grew elsewhere in the state (Fig. 2).  This is the main reason for the Western Region’s slower jobs recovery.

Fig. 2: Percentage change in employment by broad sector, Western Region and Rest of State, Q1 2012 – Q1 2015

Fig. 2: Percentage change in employment by broad sector, Western Region and Rest of State, Q1 2012 – Q1 2015

Similar to the rest of the state, Agriculture and Construction saw the largest increases in job numbers in the Western Region, driven by strong agri-food exports and a resurgence in building activity.

Conclusion

This WDC Insights shows that slower jobs recovery in the Western Region is mainly due to contraction in market services sectors, in contrast with growth elsewhere.  In every year since 2011, the numbers working in the Western Region in both Knowledge Services and in Administration and Other Services has declined. This was during a time of recovery nationally.

While the region’s strong manufacturing base and Public Services employment have compensated to some extent, it has not been enough to allow the region to enjoy a similar rate of jobs recovery as elsewhere.  Optimising growth across all sectors, and addressing challenges in the market services sectors in particular, will be required for a healthier and more resilient regional labour market.

Pauline White

 

Source: All data taken from a special run of the CSO’s Quarterly National Household Survey, Quarter 1 2012-2015 for the seven county Western Region.

Strong jobs growth in manufacturing but decline in market services in Western Region

Between 2012 and 2015 employment in market services sectors declined in the Western Region, but grew in the rest of the country.  This is the main reason for slower jobs recovery in the Western Region, where employment grew by 2.8% compared with 6.3% in the rest of the state during that period.  That’s according to a new Western Development Commission (WDC) publication Impact of Sectors on Western Region’s Jobs Recovery’.

Market services are businesses which supply services to consumers or other businesses.  During 2012-2015, jobs in Administration and Other Services (-11.4%), Locally Traded Services (retail, hospitality, transport) (-7.5%) and Knowledge Services (finance, ICT, professional services) (-7.3%) all declined in the Western Region.  This was during a period of recovery in these sectors nationally.

‘Many of these businesses rely on consumer spending.  Lower incomes in the region than in much of the rest of the state is one of the challenges they face.  The decline in Locally Traded Services has also contributed to the region’s higher youth unemployment rate of 30.8% compared with 20% in the rest of the state.  These are areas where young people often find work,’ according to Paddy McGuinness, Chairperson of the WDC.

‘Job declines in high-value, knowledge services such as ICT, which are seen as key to future growth, is a particular concern.  Improving the region’s capacity to attract and grow knowledge services activities must be central to jobs and enterprise strategies,’ he added.

On a positive note, the region’s manufacturing sector is performing strongly.  Employing 50,000 people, Industry is the single largest employer in the Western Region.  It is also more important to regional employment, accounting for 15.6% of all jobs compared with 12.2% in the rest of the state.  Over the three years 2012-2015 industrial employment in the Western Region grew by 8.3%, more than twice the growth in the rest of the state (3.4%).

‘Our manufacturing base is a core strength for the Western Region.  It is critical that we build on this strength and maintain our competitiveness as a location for globally trading Irish and foreign-owned companies, offering a highly skilled workforce, top class infrastructure and responsive higher education institutions,’ concluded Mr. McGuinness.

Similar to the rest of the state, Agriculture (+32%) and Construction (+18.2%) saw the largest increases in job numbers, driven by strong agri-food exports and a resurgence in building activity.

Download the two-page WDC Insights publication ‘Impact of Sectors on Western Region’s Jobs Recovery’ here

 

Notes to Editor:

All data taken from a special run of the CSO’s Quarterly National Household Survey, Quarter 1 2012-2015 for the seven county Western Region.

The Western Development Commission (WDC) (wdc.ie) is the statutory body promoting economic and social development in the Western Region (counties Donegal, Sligo, Leitrim, Roscommon, Mayo, Galway and Clare). Its strategic goals are:

  • To inform policy-making on economic and social development in the Western Region through high quality analysis.
  • To promote the benefits of living, working and doing business in the Western Region.
  • To encourage the development of the rural economy based on the sustainable development of the Western Region’s strengths and resources.
  • To provide risk capital to micro, small and medium sized and social enterprises in their start-up and expansion phases through the WDC Investment Fund (WIF).

Read the weekly WDC Insights Blog and follow @WDCInsights on Twitter.

Self-employment Driving Jobs Growth in the Western Region

30.8% Youth Unemployment Rate

Jobs growth in the Western Region is much slower than in the rest of the country.  Over the three years 2012-2015, the number of people at work in the region grew by just 2.8%, which was less than half the growth in the rest of the state at 6.3%. That’s according to a new Western Development Commission (WDC) publication ‘Jobs Recovery and the Western Region’.

Interestingly, many of the new jobs are classified as self-employed which demonstrates that there is an entrepreneurial culture in the region.  Over this period, the number of self-employed increased by 13.6% compared with just 0.7% growth in the number of employees.  Self-employment is a more important source of jobs in the region than elsewhere, with 1 in 5 working people in the region self-employed, compared with 1 in 6 in the rest of Ireland.

‘While the jobs recovery that is taking place in the Western Region is welcome, the slower pace means the region is not fully benefitting from improving economic conditions.  Limited job options, particularly in smaller towns, villages and  more rural areas, means that more people are having to create their own jobs,’ according to Paddy McGuinness, Chairperson of the WDC.

‘65,000 people work for themselves in the Western Region with over three-quarters of them working alone.  Fully recognising and supporting self-employment as a source of jobs growth is central to the region’s future.  Addressing issues such as social protection, broadband access, isolation and support to scale are vital for the region’s self-employed,’ he added.

The region’s slower jobs recovery is impacting on young people (15-24 yrs) in particular.  In 2015 the region’s youth unemployment rate was 30.8% compared with just 20% for those living in the rest of the country.  Young people who are out of work and not in education or training for a long time, face serious barriers in finding work.

Fig 1 - Youth unemployment rate 2006-2015

Employment in several of the sectors where young people often find jobs, such as retail and hospitality, declined in the Western Region between 2012 and 2015, while it grew in the rest of the country.

‘Our region’s young people are suffering because of the uneven regional spread of Ireland’s jobs recovery.  This reality needs to be acknowledged and addressed in any Programme for Government agreed in discussions presently taking place on the formation of a new Government,’  concluded Mr. McGuinness.

Notes:

The two-page WDC Insights publication ‘Jobs Recovery and the Western Region’ can be downloaded here

All data taken from a special run of the CSO’s Quarterly National Household Survey, Quarter 1 2012-2015 for the seven county Western Region.

Jobs Recovery and the Western Region

New WDC Insights publication

Ireland has been experiencing a gradual recovery in employment since 2012.  While jobs growth is occurring in the Western Region, it is not following the same pattern, nor occurring at the same rate, as elsewhere.

A new WDC Insights publication examines some of the distinctive aspects of the Western Region’s labour market.  Some key points are:

Lower jobs growth:  Between 2012 and 2015, there was 2.8% growth in total employment in the Western Region, less than half the jobs growth experienced in the rest of the state over the same period (6.3%) (Table 1).

Table 1- Selected employment indicators 2012-2015

Jobs growth driven by self-employment:  The jobs growth that is occurring in the region is strongly driven by self-employment.  Between 2012 and 2015 the number of self-employed in the Western Region grew by 13.6%, much higher than the 8.6% increase in the rest of the state.  On the other hand, the number of employees only grew by 0.7% in the region compared with 5.8% growth in the rest of the state over the same period.

Higher youth unemployment rate:  Young people (15-24 yrs) in the Western Region face an unemployment rate of 30.8% compared with 20% for those living in the rest of the country (Fig. 1).  Young jobseekers in the region are facing considerable barriers to accessing a job.

Fig 1 - Youth unemployment rate 2006-2015

The Western Region is experiencing a jobs recovery but this is occurring at a slower pace than elsewhere.  The key role of self-employment in the region’s jobs growth shows that it is a key route to employment, especially in rural areas with fewer job options.

The region’s young people are facing particularly stark labour market challenges.  Young people who are not in employment, education or training (NEET) for an extended period of time, face considerable barriers in accessing work.  This is likely to be compounded by the overall slower jobs recovery occurring in the region.

Download WDC Insights: Jobs Recovery and the Western Region