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Regional Agency-Assisted Jobs 2017

In August the Department of Business, Enterprise & Innovation published the Annual Employment Survey (AES) for 2017.  This provides an analysis of employment in Industrial and Services companies under the remit of IDA Ireland, Enterprise Ireland and Údarás na Gaeltachta.  This type of employment is referred to as ‘agency-assisted’.

In 2017, total permanent, full-time employment (PFT) in agency-assisted companies in Ireland was 379,810.  This was an increase of 19,369 jobs (5.4%) on 2016, continuing the growth trend in evidence since 2011.  Part-time, temporary or contract employment in agency-assisted firms also increased by 1,796 jobs in 2017 and now stands at 48,221, the highest number recorded in the 10-year period.

Combining PFT and Temporary/Part-time jobs brings total agency-assisted employment in Ireland to 428,031 in 2017.  This was 19.5% of total employment in the country in that year (average employment of 2,194,150 across the year, based on CSO’s Labour Force Survey).

The AES data includes a detailed regional breakdown of agency-assisted employment by employment type and ownership in Appendix B.

Regional agency-assisted employment

We will begin by looking at the three larger regions of the Border, Midlands & West (BMW), South & East and Dublin.  All three initially experienced declines in assisted employment but have shown strong recovery since 2012 (Fig. 1). The South & East region has consistently been the largest, though in recent years as Dublin has grown more rapidly it has narrowed the gap somewhat.  Meanwhile the gap between the BMW region and the others has widened in recent years.

Fig. 1: Total agency-assisted employment in BMW, South & East and Dublin regions, 2008-2017. Source: DBEI, Annual Employment Survey 2017, Appendix B.

To consider this in more detail, we’ll look at the BMW’s share of total agency-assisted employment in the State.  The BMW region’s share has followed a downward trend across all types of ownership (Fig. 2). For Irish-owned employment, its share fell from 27.1% in 2008 to 25.6% in 2017.  While for foreign-owned agency supported jobs, its share fell from 19.2% to 18.9% over the 10-year period though it was higher during 2011-2014.  The region has consistently accounted for a higher share of all Irish-owned employment than of foreign-owned.

Fig. 2: BMW region’s share of total national agency-assisted employment, 2008-2017. Source: DBEI, Annual Employment Survey 2017, Appendix B.

At the more detailed regional level (Fig. 3) the share of total agency-assisted employment in each region changed between 2008 and 2017.  Dublin’s share of total assisted jobs grew steadily from 34.4% in 2008 up to 37.6% in 2017.  The second largest region is the South West and its share also grew from 14.8% to 16.3%.  While the South East was third largest in 2008, by 2017 the West had moved into third position, with the South East dropping to fifth.  Only three regions – Dublin, South West and West – had a higher share of total employment in 2017 than in 2008.

Fig. 3: Percentage of total national agency-assisted employment in each region, 2008, 2012 and 2017. Source: DBEI, Annual Employment Survey 2017, Appendix B.

 

While the share of total assisted employment located in several regions declined, all regions experienced growth in their actual number of agency-assisted jobs between 2008 and 2017 (Fig. 4). Clearly the South West (36.3%), Dublin (34.6%) and West (27%) (influenced by Cork, Dublin and Galway cities) had very strong growth over the 10-year period, with the South East (5.1%) and Mid-East (7%) performing least well.  This helps to explain their deteriorating relative positions.

Looking at the most recent performance (2016-2017), Dublin, the Mid-West and South East had the strongest growth, up 6.2% in the year. While most other regions had growth of around 5% the Mid-East actually saw a decline in agency-assisted employment in the year.

Fig. 4: Percentage change in total agency-assisted employment in each region, 2008-2017 and 2016-2017. Source: DBEI, Annual Employment Survey 2017, Appendix B.

Regional employment by type

Data is provided on two types of employment – Permanent, full-time and Temporary, part-time or contract employment (referred to as ‘Other’).  The percentage of total employment that is ‘Other’ has generally increased over the 10-year period, though with considerable volatility.  Nationally 11.3% of total employment in 2017 is ‘Other’ compared with 9.1% in 2008.

At 13.4% the West region has the highest share of Temporary/Part-time/Contract employment in 2017 and the share has been increasing since 2015.  In Dublin however, which has the next highest share (12% in 2017), it has been declining (Fig. 5). At 8.9% the Mid-East has the smallest share of ‘Other’ employment.

Fig. 5: Percentage of total agency-assisted employment that is temporary, part-time or contract employment in each region, 2008-2017. Source: DBEI, Annual Employment Survey 2017, Appendix B.

Regional employment by ownership  

The balance between foreign and Irish-owned agency assisted employment differs substantially at regional level (Fig. 6). The three regions with the largest number of agency-assisted jobs, and also the strongest growth during 2008-2017 (South West, West and Dublin) have the highest shares of foreign-owned employment at over 57% in 2017.  The Mid-West is the other region where the majority of assisted jobs are foreign-owned.

The Midlands and Border regions have the lowest shares of foreign-owned employment and therefore the largest shares of Irish-owned employment. Two-thirds of assisted jobs are in Irish companies.

Fig. 6: Percentage of total agency-assisted employment in foreign-owned and Irish-owned firms in each region, 2017. Source: DBEI, Annual Employment Survey 2017, Appendix B.

Fig. 7 shows that over the 10-year period, the South West, Dublin and West all had 40+% growth in agency-assisted foreign-owned jobs.  At 21.5% the Border also had strong growth in such jobs, though from a lower base.  In contrast, the Mid-East and Midlands both experienced a fall in foreign-owned assisted employment.

It should be noted that some of the changes in job numbers by ownership may be due to a transfer of ownership e.g. an Irish company bought by a foreign company or a foreign company becoming an Irish company through a management buy-out etc.  When a company changes ownership, jobs in that company are re-classified as Irish or foreign and the changes back-dated to previous years.

Irish-owned assisted jobs grew across all regions during 2008-2017, most strongly in the Mid-East somewhat compensating for declining foreign-owned employment.  The South West, Dublin and Midlands also had around 20% growth in Irish-owned assisted jobs with the South East and Border regions performing worst.

Irish-owned assisted employment out-performed foreign-owned in three regions (Mid-East, Midlands and Mid-West). In the case of the West, growth in foreign-owned assisted jobs was over three times greater than growth in Irish-owned assisted jobs, in Dublin and the South West it was about double.

Fig. 7: Percentage change in total agency-assisted employment in foreign-owned and Irish-owned firms in each region, 2008-2017. Source: DBEI, Annual Employment Survey 2017, Appendix B.

Over the past year (Fig. 8), all regions experienced growth in both foreign and Irish-owned assisted employment, except for foreign-owned jobs in the Mid-East. The South East (9.4%) and Dublin (7.2%) had strong growth in foreign-owned jobs with the Mid-East, Midlands and Border performing least well.  For Irish-owned jobs, the Mid-West, West and Midlands performed strongly.

In general there was less regional variation in the performance of Irish-owned assisted employment compared with foreign-owned.  Irish-owned firms out-performed foreign-owned in all regions except the South East, Dublin and South West.

Fig. 8: Percentage change in total agency-assisted employment in foreign-owned and Irish-owned firms in each region, 2016-2017. Source: DBEI, Annual Employment Survey 2017, Appendix B.

Conclusion

The strong growth trend evident in agency-assisted employment for the past number of years continued in 2017. All regions had a greater number of agency-assisted jobs in 2017 than they had in 2008.  There were considerable regional variations however, with the South West, Dublin and the West experiencing extremely strong jobs growth over the decade, substantially driven by foreign-owned companies, which led to their combined share of total assisted jobs increasing from 58.5% in 2008 to 63.5% in 2017. These three regions also have the highest shares of foreign-owned employment and two of them (West, Dublin) have the highest shares of Temporary/Part-time employment.

While all other regions have also seen growth in the numbers working in agency-assisted firms, this has been at a substantially lower level. The Mid-East and Midlands actually have fewer jobs in foreign-owned assisted firms in 2017 than they had in 2008, though growth in Irish-owned assisted jobs compensated for this, leading to overall growth.  The Border and Midlands show the highest shares of Irish-owned assisted employment and in the past year (2016-2017) Irish-owned firms out-performed foreign-owned in these two regions, as well as in the West, Mid-West and Mid-East.

While the foreign-owned sector has been a strong driver of assisted employment growth, especially in the Dublin, South West and West regions and in the initial stages of the recovery, the Irish-owned sector has responded strongly in more recent years and shows a more even geographical spread.

Pauline White

City Led Regional Development and Peripheral Regions- Conference Report

The Regional Studies Association Irish Branch Annual Conference was held in the Institute of Technology Sligo on Friday 7th September.  Appropriate for the location, it had the theme “City Led Regional Development and Peripheral Regions”.  The presentations are available here.

Figure 1: Dr Chris O’Malley from Sligo IT

The conference covered a range of themes relating to regional development and how urban areas interact with their rural regions.  It was opened by Dr Chris O’Malley from Sligo IT who discussed the role of Sligo IT in the development of industry and manufacturing in the region and the IT’s role as an integrator of national policy at regional level.  Dr Deirdre Garvey, chairperson of the Western Development Commission, welcomed delegates to the conference noting how pleased the WDC was to be sponsoring the Annual Conference.  She also welcomed the fact that the conference was taking place in the North West, given the recognition in the National Planning Framework of the specific challenges for the region and how the National Planning Framework (NPF) and Regional Spatial and Economic Strategy (RSES) process highlight the distinct challenges and opportunities for our predominantly rural region.

These addresses were followed by a very interesting session on the history of Irish planning over the last 50 years.  Dr Proinnsias Breathnach (Maynooth University) presented on regional development policy following the 1968 Buchanan report and its impact on industry locations and spatial development.  Dr Breathnach also presented the paper by Prof. Jim Walsh (Maynooth University) who was unable to attend the conference.  He examined the influence of both the Buchanan report and the 2002 National Spatial Strategy, considered the learnings from these and the factors which will influence the success of the National Planning Framework process.  Finally in this session, Prof. Des McCafferty (University of Limerick) presented on the structural and spatial evolution of the Irish urban hierarchy since Buchanan, and examined urban population data over time and the distribution of population across the settlement hierarchy.  He noted that it was important to understand changes projected by the NPF in the context of historic trends

Figure 2: Dr Proinnsias Breathnach (Maynooth University), Prof. Des McCafferty (University of Limerick) and Deirdre Frost (WDC)

After coffee the session on Regional Strategy and Planning covered a broad range of topics.  Louis Nuachi (DIT) presented on the importance of social and cultural objectives in town planning using a case study of planning in Abuja, the capital of Nigeria.  David Minton, the CEO of the Northern and Western Regional Assembly (NWRA) discussed issues for the development of the North and West in the RSES, some of the historic development of the region and a number of the challenges in developing a region wide approach.  Finally in that session, John Nugent (IDA) discussed the IDA role in attracting Foreign Direct Investment to the region and some of the important factors which influence the location of FDI, including the importance of having a strong indigenous sector already in place and the ways the indigenous and foreign sectors are mutually beneficial.

After lunch international perspectives were provided by Dr Andrew Copus from the James Hutton Institute in Aberdeen and Professor Mark Partridge, the C. William Swank Chair of Rural-Urban Policy at The Ohio State University.

Dr Copus paper  The Scottish City Region Deals – A rural development perspective noted that optimistic assumptions about how a wider functional region benefits from city investments, are commonplace and generally unquestioned, despite meagre evidence of such impacts.   He discussed the two strands of ideas on policy for urban rural development that of polycentricity and rural urban co-operation (theories which are stronger in EU countries and in OECD work), and City Regions (which have tended to have more focus in the UK).  He highlighted the importance of defining what is meant by rural when considering the impact of such regional policies and  he discussed the development and implementation of regional policy by the Scottish and UK governments in Scotland.

He noted that in general in these deals the dominant rationale relates more to “Smart Specialisation” than to any kind of urban rural cooperation, interaction or spread effect concept, but the way growth deals developing for rural areas of Scotland will fit into the Post Brexit rural development landscape remains to be seen.

Figure 3: Audience at the conference

Prof. Mark Partridge’s paper Is there a future for Rural in an Urbanizing World and Should We Care? noted how rural areas have received increased attention with the rise of right-wing populist parties in Western countries, in which a strong part of their support is rural based. Thus, bridging this rural-urban economic divide takes on added importance in not only improving the individual livelihoods of rural residents but in increasing social cohesion.

He discussed the background of rural and peripheral economic growth, noting the United States is a good place to examine these due its spatial heterogeneity.   He showed that, contrary to public perceptions, in the US urban areas do not entirely dominate rural areas in terms of growth.  Rural US counties with greater shares of knowledge workers grow faster than metro areas (even metros with knowledge workers).

He had some clear suggestions for regional policy, noting that governance should shift from separate farm/rural/urban policies to a regional policy though a key issue is to get all actors to participate and believe their input is valued. In rural development it is important to leverage local social capital and networks to promote good governance and to treat all businesses alike and avoid “picking winners.  Rural communities should be attractive to knowledge workers and commuters, while quality of life, pleasant environment, sustainable development; good public services such as schools are important to attract return migrants.  Building local entrepreneurship is key too and business retention and expansion is better than tax incentives for outside investment.

Figure 4: Dr Chris Van Egeraat (Maynooth University)

In the final session ‘Understanding Regional and Urban Dynamics’ I gave a presentation on what regional accounts can tell up about our regional economies and discussed some of the issues associated with the regional data and the widening of disparities among regions.  Dr Chris Van Egeraat (Maynooth University) presented a paper, written with Dr Justin Doran (UCC) which used a similar method to Prof. Partridge to estimate trickle down effects of Irish Urban centres and how they influence the population in their wider regions.  Finally Prof. Edgar Morgenroth (DCU) presented on the impacts of improvements in transport accessibility across Ireland highlighting some of the changes in accessibility over time and noted that despite these changes human capital is the most important factor influencing an area’s development.

While the conference had smaller attendance than previous years there was good audience participation and discussion of the themes.  The conference papers are now available on the WDC website here and will shortly be available on the RSA website.

 

Helen McHenry

City Led Regional Development and Peripheral Regions- join the debate!

The theme of this year’s Regional Studies Association Irish Branch Annual Conference, to be held in the Institute of Technology Sligo on Friday 7th September, is “City Led Regional Development and Peripheral Regions”.

The conference will examine how urban areas interact with their rural regions and whether the development of the city or urban area leads to wider development.

Two international experts, Dr Andrew Copus from the James Hutton Institute in Aberdeen and Professor Mark Partridge, the C. William Swank Chair of Rural-Urban Policy at The Ohio State University, have been invited to present other countries’ experience on this theme and to stimulate debate about the reality of city led development.

Andrew’s paper  The Scottish City Region Deals – A rural development perspective. considers how urban-rural interaction is a long-established element of the “theory of change” associated with regional development policy. Optimistic assumptions about wider functional region benefits of city investments, are commonplace and generally unquestioned, despite meagre evidence of such impacts. A summary history of urban-rural concepts in the European policy discourse, will be followed by a brief account of rural/regional policy in Scotland. Against this background the origin and evolution of Scotland’s City Region Deals, and Regional Partnerships, will be described. The presentation will conclude with some reflections on the how these evolving arrangements fit into an already cluttered policy landscape, their compatibility with rural policy “mainstreaming”, and the likely benefits for rural Scotland.

Mark’s paper Is there a future for Rural in an Urbanizing World and Should We Care? examines how rural areas have received increased attention with the rise of right-wing populist parties in Western countries, in which a strong part of their support is rural based. While the underlying reasons are complex and unique to each country, one common feature is that rural areas have typically faced recent economic decline, creating anxiety, and in some cases, anger of rural residents directed at their urban counterparts. Thus, bridging this rural-urban economic divide takes on added importance in not only improving the individual livelihoods of rural residents but in increasing social cohesion. One way to bridge this economic gap is to improve rural-urban economic linkages through an urban-led economic strategy. For example, urban growth can create commuting and market opportunities for rural residents and firms if there is sufficient connectivity. While such a process has strong theoretical advantages it also requires rural areas to more carefully think about quality of life to attract and retain residents who would otherwise relocate to urban areas.

The issues in Ireland are examined in other presentations and it is to be hoped that the conference will provide useful input to the discussion about regional development in Ireland as the Regional Spatial and Economic Strategies of Project Ireland 2040 are drafted. The draft conference programme is below.

Detailed Conference Information can be accessed here (including speaker bios, directions, and accommodation). 

Register here for the conference (€70 including lunch) and come along and join in the debate.

 

Helen McHenry

Understanding Changes in the Components of County Incomes

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

 

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

 

Figure 1: Total Household Income per person

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

 

Primary Income

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

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

 

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

Source: CSO, 2018, County Incomes and Regional GDP

 

What is Primary Income made up of?

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

 

Figure 3: Contributors to Primary Income, 2015

Source: CSO, 2018, County Incomes and Regional GDP

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

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

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

 

Figure 4: Self employment as percentage of Primary Income

Source: CSO, 2018, County Incomes and Regional GDP

 

Social Benefits over Time

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

 

Figure 5: Social Benefits and Other Current Transfers per person

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

 

Taxation levels over time

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

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

 

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

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

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

 

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

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

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

 

Conclusion

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

 

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

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

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

 

 

Helen McHenry

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

WDC Insights Publications on County Incomes and Regional GDP

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

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

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

How are we doing? County Incomes in the Western Region

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

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

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

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

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

 

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

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

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

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

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

 

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

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

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

How are we doing? County Incomes in the Western Region

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

 

Helen McHenry

Annual Conference of Regional Studies Association

The WDC is sponsoring this year’s Annual Conference of the Irish Branch of the Regional Studies Association. The theme of this year’s conference is ‘City Led Regional Development and Peripheral Regions’ and takes place on Friday, 7th September at IT Sligo

Submission themes

The call for papers for the conference is now open. Abstracts of no more than 250 words can be submitted here. Presentations from policymakers, academia and practitioners active in the field of regional studies, as well as post-graduate students are welcome. Presentations may deal with, amongst others, the following themes:

  • Cities as a source of economic growth
  • Development in peripheral regions
  • Urban centres and economic development
  • The National Planning Framework and governance
  • The National Planning Framework and housing
  • Regional Spatial and Economic Strategies
  • Local and regional economic forums
  • New approaches to regional development
  • International comparator cases

Other contributions dealing with the topic of regional studies are invited and may be included in focussed sessions.

Speakers

Two international speakers have already been confirmed:

Dr Andrew Copus, The James Hutton Institute, Scotland: Andrew Copus joined the Social, Economic and Geographical Sciences Group of The James Hutton Institute in March 2013. For the previous eight years he was a Senior Research Fellow at Nordregio (Nordic Centre for Spatial Development, Stockholm) and the Centre for Remote and Rural Studies, University of the Highlands and Islands.

Andrew is an economic geographer by training, whose research interests relate to the changing rural economy and rural/regional policy. Much of his work has been based upon analysis of small area or regional secondary data and indicators. He has a long-standing interest in territorial rural development and regional disparities, which through recent projects is presented as “rural cohesion policy”.

Much of Andrew’s work has had a European perspective, variously funded by Framework Programmes, ESPON and as a consultant for the European Commission. He has studied the role of rural business networks, the changing nature of peripherality and most recently, patterns and trends in poverty and social exclusion.

Professor Mark Partridge, ​Ohio State University, USA: Mark Partridge is the C. William Swank Chair of Rural-Urban Policy at The Ohio State University and a Professor in the AED Economics Department. He has published over 125 peer-reviewed journal papers in journals such as the American Economic Review, Journal of Economic Geography, Journal of Urban Economics, and Review of Economics and Statistics. He co-authored the book ‘The Geography of American Poverty: Is there a Role for Place-Based Policy?’

Dr. Partridge’s current research interests include investigating regional economic growth, urban spillovers on rural economies, why regions grow at different rates, and spatial differences in income equality and poverty.  Dr. Partridge has consulted with OECD, Federal Reserve Bank of Cleveland, and various governments in the U.S. and Canada, as well as with the European Commission. He has presented to the U.S. Congress and the Canadian Parliament on regional issues.

Registration

The conference fee will be €70, including lunch, and online registration will open in the coming months. In the meantime any queries regarding registration should be sent to chris.vanegeraat@mu.ie or Justin.doran@ucc.ie

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

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

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

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

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

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

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

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

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

b Preliminary results for 2016

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

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

Disparities within the State

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

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

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

b Preliminary results for 2016

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

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

 

EU comparison

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

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

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

b Preliminary results for 2016

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

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

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

b Preliminary results for 2016

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

 

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

 

Productivity

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

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

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

 

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

Economic Sectors

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

Figure 7: Gross Value Added by Sector 2015

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

 

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

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

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

 

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

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

 

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

 

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

 

Conclusion

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

 

 

Helen McHenry

 

[1] GDP is Gross Domestic Product, GDP and GVA are the same concept i.e. they measure the value of the goods and services (or part thereof) which are produced within a region or country. GDP is valued at market prices and hence includes taxes charged and excludes the value of subsidies provided. GVA at basic prices on the other hand excludes product taxes and includes product subsidies. See background notes .

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

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

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

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

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

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

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

The size of the Regional Economies

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

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

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

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

Output from these regions over time

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

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

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

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

GVA per person in Regions

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

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

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

 

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

Which regions are most affected by the 2015 level shift?

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

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

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

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

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

 

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

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

Manufacturing and other sectors affected

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

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

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

 

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

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

Figure 6: Regional contribution to Manufacturing GVA in 2015

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

 

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

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

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

 

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

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

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

 

Conclusions

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

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

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

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

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

 

 

Helen McHenry

 

[1] GDP is Gross Domestic Product, GDP and GVA are the same concept i.e. they measure the value of the goods and services (or part thereof) which are produced within a region or country. GDP is valued at market prices and hence includes taxes charged and excludes the value of subsidies provided. GVA at basic prices on the other hand excludes product taxes and includes product subsidies. See background notes .

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

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

How are we doing? County Incomes in the Western Region

The CSO released data on County Incomes and Regional GDP in 2015 last month (and also published preliminary figures for 2016).  In this post changes in county incomes in the Western Region are examined with a particular focus on the difference among counties and the changes over time.  Regional GDP will be considered in a forthcoming post.

The map (produced by the CSO) gives an indication of the differences in Household Disposable Income per Person across the State.

Source: CSO, 2018, County Incomes and Regional GDP

 

Clearly Dublin has a significantly higher Household Disposable Income per Person than elsewhere, with Kildare and Limerick also above the state average, while many counties in the West and North West have Disposable Incomes well below the state average.

A quick overview of the recent trends in Household Disposable Incomes per Person is given in Figure 1, showing changes in the Western Region counties over the last decade. The 2008 peak and following rapid income decline is very clear but the recovery of income levels from 2014 onwards is also evident.

Figure 1: Household Disposable Income per Person 2006-2016 for Western Region counties

*Preliminary

Source: CSO, 2018, County Incomes and Regional GDP

 

No county in Ireland has returned to the income levels of 2008, and indeed in the Western Region only Sligo was estimated to have very slightly higher (€14) Household Disposable Income per Person in 2016 than it did in 2007 (along with only 4 other counties: Dublin, Wicklow, Limerick and Kerry).

Looking at the most recent figures, Galway (€18,991) and Sligo (€19,001) had the highest Disposable Incomes per Person in the Western Region in 2015 with Sligo higher than Galway for the first time, although the gap between them has been narrowing in recent years. In the preliminary 2016 figures Galway had a very slightly higher disposable income per person (Table 1).

Table 1: Household Disposable Income per Person in 2015 and 2016 for the counties of the Western Region

 

*Preliminary

**Western Region figures based on own calculations using inferred population estimates.

Source: CSO, 2018, County Incomes and Regional GDP

 

Donegal continues to have a significantly lower Disposable Income per Person than any other county Ireland (€15,705 in 2015).  This was just over 77% of the state average that year. Disposable Income in Roscommon is also significantly lower than the state average (81.5%) at €16,582 in 2015.  This was the second lowest of any county in Ireland, while Mayo was the 4th lowest (see Figure 2 below).  Sligo and Galway were in 13th and 14th places, but no Western Region county had more than 95% of the State average Disposable Income.

Figure 2: Household Disposable Income per Person in 2015 for all counties

Source: CSO, 2018, County Incomes and Regional GDP

 

Preliminary figures for 2016 (Figure 3) show that all counties had small increases in Household Disposable Income per person on 2015, the largest increase in that period (2015-2016) was in Galway (2.9%) while the smallest was in Donegal (2.5%).

Figure 3: Household Disposable Income per Person in 2015 and 2016* for Western Region counties

*Preliminary

**Western Region figures based on own calculations using inferred population estimates.

Source: CSO, 2018, County Incomes and Regional GDP

 

Increases were larger between 2014 and 2015 (see Table 1) with Sligo showing an increase of 5.7%, the lowest Western Region county increase was in Roscommon at 2.0%.  The state average increase for that period was 5.6% and Household Disposable Income per Person in Dublin grew by 6.3%.  These differing growth rates among counties are giving rise to increasing regional imbalance as is shown in Figure 4 which charts the income in Western Region counties as compared to the state average (State =100).

The gap between most counties in the Western Region and the state was at its widest in 2001 and narrowed (i.e. they got closer to the state average) during the boom period and into the slowdown.  In fact regional divergence was least in 2010 when all parts of the country were significantly affected by recession.  Since then, as discussed, incomes in some counties began to grow faster and divergence has again increased, particularly since 2012.

Figure 4: Index of Household Disposable Incomes per person in Western Region counties 2000-2016

*Preliminary

Source: CSO, 2018, County Incomes and Regional GDP

 

The pattern has not been straightforward, however, some counties were closer to the State average in 2000.  For example Clare was 96.4% of the state average in 2000 and Roscommon was 91.1% but by 2016 Clare was 88.8% and Roscommon was 81.3%, showing that they have been doing relatively less well.  Others, like Sligo where Household Disposable Income per Person was 88.1% of the State average in 2000 and 93.3% in 2016, and Leitrim which was 86.5% in 2000 and 89.6% in 2016, have narrowed the gap to the state average and are improving relatively.

The divergence in Income levels among counties would be much greater without the redistribution effects of social transfers and taxes.  Counties with the highest Primary Incomes[1] tend to have relatively lower social transfer figures (having fewer people in older and younger age categories or otherwise not working) and  higher tax (with more people earning and often higher incomes). See this post for more discussion of the components of change.  Figure 5 shows the percentage difference between Household Disposable Income and Primary Income for each county in 2015.  Counties which are doing well (e.g. Dublin, Kildare) tend to have a higher Primary Income level than Household Disposable Income level, while less well-off counties tend to have a higher Household Disposable Income than Primary Income (the difference being, as noted above, the effect of Social Transfers and Taxes).  The relationship is not simple however, counties which rank lowest for disposable income will not necessarily have a similar rank for Primary Income.  For more discussion of Primary Income see this post.

Figure 5: Percentage Difference between Household Disposable Income and Primary income for each county in 2015

Source: CSO, 2018, County Incomes and Regional GDP

 

 

This post has provided a brief overview of the key County Income figures for the Western Region based on the recent CSO release.  Regional GDP will be examined in a future post with the components and trends will be analysed in more detail in the coming months.

 

 

Helen McHenry

 

[1] Primary Income is defined for National Income purposes as follows: Compensation of employees (i.e. Wages and Salaries, Benefits in kind, Employers’ social insurance contributions) plus Income of self-employed plus Rent of dwellings (including imputed rent of owner-occupied dwellings) plus Net interest and dividends.

Total income is defined as: Primary income plus Social benefits plus Other current transfers.

Disposable income is defined as follows: Total income minus Current taxes on income (e.g. Income taxes, other current taxes) minus Social insurance contributions (e.g. Employers’, employees’, self-employed, etc.)

What are the Capital Infrastructure Priorities for the Western Region?

Last week the WDC made a Submission to the Public Consultation on the Mid-term Review of the Capital Plan 2016-2021.

The consultation sought views as to what should be included in the current Plan (€42 billion), over and above what is already included – arising from additional resources (€5 billion) being made available.

In addition, an interesting and welcome aspect was that the Consultation also sought views on the criteria which should inform consideration of the capital investment choices to be made. This was in the context of the remainder of the current plan, but also and arguably of more importance in the context of a longer term 10 year Capital Plan.

This idea of a longer term 10 year Capital Plan acknowledges another important Public Consultation underway – the National Planning Framework (NPF) and the need to consider investment priorities which would align and support the final NPF. A draft NPF is due for consideration over this Summer.

In discussing the Considerations for the Mid-Term Review of the Capital Plan (Section 2), the WDC highlighted the importance of infrastructure for regional development where all regions need quality infrastructure to compete effectively. The WDC submission also noted;

  • The importance of long-term planning, as decisions made on infrastructure now have very long term impacts.
  • The need to invest to join existing networks together and complete ‘unfinished sections’. For example once the Gort-Tuam motorway is complete, the priority should then be to improve the outstanding sections between Tuam and Sligo to ensure a high quality road network.
  • Identify and utilise existing available capacity before considering new investments at congested sites. For example there is international air access capacity available at Shannon and Ireland West Airport Knock. Another example is to develop more attractive services on the rail network, which is a valuable transport asset with capacity to ease congestion on the road network and help us meet Ireland’s climate change obligations.
  • Develop inter-regional linkages. While connectivity to Dublin from most regions has improved considerably in the last decade, inter-regional connectivity is relatively poor. By improving inter-regional connectivity, such as improving the road network between the urban centres in the Mid-West, West and North West then the investment potential of the key urban centres there can be enhanced.

The WDC submission also notes the importance of appropriate appraisal and evaluation methods when considering alternative investment projects. The capital appraisal and evaluation methods determining the costs and benefits of different investment projects need to be re-examined. The traditional cost benefit approach will naturally favour the larger and often largest population centres as the impacts are likely to be felt by a greater number, wherever the project is being delivered. To realise better spatial balance, there will need to be a change to the conventional appraisal and evaluation methodologies which are typically used to determine what projects proceed. The impact on the wider spatial balance of the country should be factored in.

In the section examining the prioritisation of Capital Expenditure and Selection of Projects/Programmes in current Capital Plan (Section 3), the WDC focused on the infrastructure areas it considers critical for Western development.

Key priority infrastructural investments include:

  • Funding to deliver and complete the National Broadband Plan as soon as possible to ensure high speed broadband for all.
  • National primary road improvements including N4, N5, N6, M17, M18, incorporating the Atlantic Road corridor.
  • National secondary roads see WDC Submission for specific priorities.
  • There is a need to increase regional and local roads funding to allow road maintenance programme to be enhanced.
  • The importance of Bus services and the Rural transport programme to citizens in the Western Region is highlighted.
  • Continue investment is needed to support increased rail frequencies and service levels on routes serving the Western Region.
  • Ongoing support for improvements and access to Ireland West Airport Knock and Shannon.
  • Investment in the electricity network and natural gas infrastructure is made through the commercial state sector, but it should be co-ordinated and monitored through the Capital Investment Plan.
  • Apart from completing all energy commitments in the Capital Plan there should be investment to connect to the natural gas grid at Athenry, Ballyhaunis and Knock, all three of which qualified for connection in 2006.

In Section 4, Long-term Capital Investment Framework (10 years), the WDC Submission examines the longer-term considerations needed for effective capital investment. The WDC believes that capital investment which is by its nature long-term investment should be undertaken within the context of a longer term planning framework as is proposed in the National Planning Framework 2040. The WDC has made a detailed submission to the NPF (4.5 MB) consultation conducted by the Department of Housing, Planning, Community and Local Government.

Other considerations include:

Capital spending on new infrastructure should focus on supporting better spatial balance as well as supporting those citizens and that part of the country which is relatively poorly served. Quality infrastructure is one of the necessary conditions for regional development.

Investment in road infrastructure to join existing networks together and complete ‘unfinished sections’. For example in the West/North West. These are often infrastructure requirements needed to satisfy current as well as future demand.

As outlined previously, the state should capitalise on the capacity already available and ‘sweat’ the state investment already made, such as in transport, for example the rail network and the international airports with spare capacity such as Shannon and Ireland West Airport Knock. Other examples include educational infrastructure (Institutes of Technology), Health facilities and Housing.

Policy will also influence the infrastructure investments needed. The need to lower carbon emissions will help influence infrastructural investments (for example supporting cleaner transport modes).

Another consideration is to enable greater policy integration and joined up investment decisions across all sectors, for example planning, employment and transport policy sectors, which are proven to help to make sustainable and active travel more attractive alternatives to the private car.

A good example is the benefits which could be realised through increased e-Working, see WDC Policy Briefing No.7 (748 KB) which can reduce transport demand, traffic congestion and emissions. It has been estimated that if just 10% of the working population of 2.1 million were to work from home for 1 day a week, there would be a reduction of around 10 million car journeys to work per annum[1]. Benefits arising from higher broadband speeds and greater levels of e-Working include time savings, enhanced communications, increased sales and productivity gains[2]. To promote greater take-up, e-Work needs to be prioritised as a policy objective and a cross departmental approach is required. Lead departments would include the Department of Jobs, Enterprise and Innovation and the Department of Communications, Climate Change and Environment.

The WDC Submission is available for download here (4 MB).

Deirdre Frost

[1]Department for Transport, Smarter Travel: A Sustainable Transport Future, A New Transport Policy for Ireland 2009-2020 http://www.smartertravel.ie/sites/default/files/uploads/2012_12_27_Smarter_Travel_english_PN_WEB%5B1%5D.pdf#overlay-context=content/publications. p.35

[2] Indecon International Economic Consultants, July 2012. Economic / Socio-Economic Analysis of Options for Rollout of Next Generation Broadband. Analysis undertaken on behalf of the Department of Communications, Energy and Natural Resources (DCENR) as part of the Government’s National Broadband Plan, 2012. http://www.dccae.gov.ie/communications/SiteCollectionDocuments/Broadband/National%20Broadband%20Plan.pdf