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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.

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

WDC Insights- Christmas Quiz!

We hope you have been following and reading the WDC Insights blog in the last year. Take our Christmas Quiz (9 questions) and see how well you score on regional development and Western Region issues. The answers are below with links to more information and the relevant posts.

Good Luck!

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1      The WDC published its report on ‘Trends in Agency Assisted Employment in the Western Region’ in January. This included an analysis of data for each of the seven western counties. In 2013 what proportion of the total jobs in Sligo were agency assisted?

  1. 63.2%
  2. 27.6%
  3. 15.3%

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2      Agriculture in the Western Region of Ireland is characterised by smaller farm size, poorer land quality and a higher dependence on off farm income than in many other parts of Ireland. Nonetheless agriculture remains a significant employer and makes an important contribution to the regional economy.

What is the average farm size in the Western Region?

  1. 43.7 ha
  2. 15.2 ha
  3. 26.3 ha

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3      In the latest CSO data on Income and Living Conditions (released 26th November) poverty and at risk of poverty rates are given. What is the difference between the at risk of poverty rates between the BMW and S&E regions?

  1. 5.7%
  2. 15.2%
  3. 1.3%

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4      In a recent a creative momentum project survey what proportion of creative entrepreneurs were exporting?

  1. 8%
  2. 48%
  3. 68%

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5      Examining regional indicators can help us to understand the growth and development taking place in our regions, to highlight changes and assess issues of efficiency and equity among regions.

Looking at the data since 2003 are regional disparities

  1. Widening?
  2. Narrowing?
  3. Staying the same?

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6      Understanding the sectoral pattern of jobs in the region and patterns of sectoral growth and decline is particularly important to the development of job creation, skills and enterprise policy for the region.

What is the largest employment sector in the Western region?

  1. Industry
  2. Wholesale and Retail
  3. Public Administration and Defence

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7      The WDC has been highlighting rural broadband needs for more than a decade. It recently submitted its views to the consultation on the rollout of the National Broadband Plan.

What is the minimum download speed set down under the National Broadband Plan (in Mega bits per second (Mbps))?

  1. 30 Mbps
  2. 100 Mbps
  3. 12 Mbps

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8      In February 2015 the IDA published a new 5-year strategy which put considerable focus on the regional balance of future FDI investments. The strategy includes a target to increase the number of investments in every region, outside of Dublin. By how much are the investments in the regions targeted to increase?

  1. By 10-20% over the 5 years of the strategy?
  2. By 30-40% over the 5 years of the strategy?
  3. By 80-90% over the 5 years of the strategy?.

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9      With The Paris Agreement at COP21 marking a turning point in the response to climate change, it is time to consider how we will meet those targets in Ireland so we examine some of the issues for climate change mitigation in the Western Region in this post.

What percentage of households in the Western Region use oil to heat their homes?

  1. 63.1%
  2. 84.2%
  3. 38.8%

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Answers:

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  1. Assisted jobs

Answer:3) 15.3%

The WDC published a report on ‘Trends in Agency Assisted Employment in the Western Region’ in January 2015.week. This included an analysis of data for each of the seven western counties. Taking Sligo as an example in 2013, there were 3,880 people working in agency assisted jobs there. 15.3% of total jobs in the county were agency assisted, which is below the state average (19.3%). Some 55.6% of assisted jobs in Sligo are in foreign owned companies; lower than a decade earlier. Irish owned assisted employment has grown steadily since 2011 and was up 4.8% in 2013. Sligo’s second largest assisted sector – Traditional Manufacturing – has had the strongest recent growth, up a fifth (21.5%) between 2010 and 2013.

For more about agency assisted jobs in the other Western Region counties see this post

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  1. Farm size

Answer: 3) 26.3 ha

Agriculture in the Western Region of Ireland is characterised by smaller farm size, poorer land quality and a higher dependence on off farm income than in many other parts of Ireland. Nonetheless agriculture remains a significant employer and makes an important contribution to the regional economy.

The average farm size in the Western Region (counties Clare, Donegal, Galway, Leitrim, Mayo, Roscommon and Sligo) was 26.3 ha in 2010. Farm sizes are significantly smaller than in the rest of Ireland where the average farm in 2010 was 36.9 ha. Nonetheless farm size in the Western region has grown by a third since 1991 when the Western Region average was 19.8 ha with most of the growth occurring in the 1990s (almost 27% of the growth occurred between 1991 and 2000). For more information, read this post.

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  1. Poverty data

Answer: 1) 5.7%

The CSO released the latest data on Income and Living Conditions on 26th November 2015. The headline figures indicate a rise in incomes – increasing by 3.5% between 2013 and 2014, which in turn was higher than the figure in 2012. The release also provided data on poverty rates at a regional level.   Analysis of consistent poverty rates by region, which will be influenced by rural-urban patterns, shows that the rate for the Border, Midlands and Western region was 10.8% compared with 7.0% for the Southern and Eastern region in 2014. The at-risk of poverty-rate was also higher in the Border, Midlands and Western region compared to the Southern and Eastern region, 20.5% and 14.8% respectively. The difference was 5.7%.

For more on poverty and at-risk of poverty rates see this post.

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  1. a creative momentum project survey

Answer: 3) 68%.

In order to inform the development a creative momentum project activities, an online survey was circulated to creative entrepreneurs based in the participating regions. The survey ran from 28 September to 18 October and there were a total of 170 responses.

68% reported that they made some sales outside of their own country, which was higher than indicated in previous surveys. Cross-border business between Ireland and Northern Ireland seemed to be a strong element in these export sales. Of those businesses who did not export currently (44), 70% indicated a desire to export.

For more on the survey see this post

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  1. Regional Disparities

Answer: 1) Widening

There has been a significant widening of the gap between the BMW and the S&E regions since 2008, the difference in 2012 was 48.3 points and in 2008 was 40.6 points (in 2003 it was 42.6).

Disparities in regional GVA have been increasing in recent years and have been particularly significant since 2008 while, in contrast, disparities in disposable income reduced between 2003 and 2010, but have increased since then. For more see this post

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  1. Employment sectors

Answer: 2) Wholesale and Retail.

The largest employment sector is Wholesale and Retail and the two largest employment sectors in the Western Region are Wholesale and Retail, and Industry which together account for about 30% of jobs.  Of the region’s top seven sectors, all (except Health) account for a greater share of jobs in the region than the rest of the state.  Agriculture and Industry (manufacturing) are considerably more important in the region.  Among the region’s smaller sectors the share working in them in the region is considerably below that in the rest of the state.

In general the Western Region’s jobs profile relies more heavily than the rest of the state on the traditional sectors (Industry, Agriculture and Construction) and local services (Wholesale and Retail, and Accommodation and Food Service) which depend on domestic spending and tourism.  The region’s sectoral jobs pattern is influenced by its largely rural nature. For more information see this post

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  1. Broadband

Answer: 1) 30Mbps

The WDC in its submission to the consultation on the rollout of the National Broadband Plan suggests that one option would be to review the basic minimum standard, for both up and download speeds, every 5 years (or more frequently depending on technological change and demand requirements) and raise the minimum standard accordingly. For more from the WDC on broadband see here and here

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  1. IDA Strategy

Answer: 2) 30-40% over the 5 years of the strategy

The strategy includes a target to increase the number of investments in every region, outside of Dublin, by 30-40% over the lifetime years of the strategy. With Dublin maintaining a similar level to currently. For example for the West, which received 71 investments over the 2010-2014 period, the target is to achieve 92-99 investments over 2015-2019. For the Border region the target is 61-66 investments (it received 47 in the past five years). These targets do not just refer to new name investments, but include expansions by existing FDI companies and R&D investments.

Read more about it here.

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  1. Climate change

Answer: 1) 63.1% of homes use oil as their main heating fuel

The pattern of fuel usage in central heating is very different in the Western Region and the rest of the state. This is primarily due to the lack of access to natural gas across most of the region. Less than 5% of households in the Western Region use natural gas to heat their home compared with 40% in the rest of the state. Lack of access to natural gas makes the Western Region far more reliant on other fuels, many which have higher carbon emissions. Oil is used by 63.1% of households in the region compared to 38.8% in the rest of the state. Wood fuels and other biomass are slightly more important in the Western Region 1.4% compared to 1.3% in the rest of the state but there needs to be a significant policy focus using renewable energies for domestic heating. These include solid biomass (wood chips, pellets and logs). In many rural situations users have more space and fuel can be sourced locally with less transport required, so these options may be more suitable than for urban dwellers. Uptake could be improved with appropriate, targeted incentives.

For more on rural urban differences, western region statistics and the need for climate change mitigation to focus on rural areas see this post.

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How well did you do?

You got 8 or 9 answers correct

CONGRATULATIONS! You really know a lot about regional development, the Western Region and the Western Development Commission’s work.

 

You got between 4 and 7 answers correct

WELL DONE, a good score but some deficiencies in your knowledge. Perhaps you should read the WDC Insights posts more carefully in 2016!

 

You got between 0 and 3 answers correct

OH DEAR! Time to pay more attention to regional development and Western Region Issues. You’ll have to do some extra study over the holiday! Reread the WDC Insights blog and check out the WDC publications page and re-take the quiz in the New Year!

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Helen McHenry

The Western Region’s Sectoral Profile

We’ve just published WDC Insights-The Western Region’s Sectoral Profile-April 2015 (PDF 0.2MB) which presents the key findings from The Western Region’s Labour Market 2004-2014-WDC Report March 2015 (PDF 2.5MB) on the region’s sectoral pattern of employment.

Understanding the sectoral pattern of jobs in the region, and recent patterns of sectoral growth and decline, is particularly important to the development of job creation, skills and enterprise policy for the region.

Sector of employment

The two largest employment sectors in the Western Region are Wholesale and Retail, and Industry with around 30% of jobs (Fig. 1).  Of the region’s top seven sectors, all (except Health) account for a greater share of jobs in the region than the rest of the state.  Agriculture and Industry (manufacturing) are considerably more important in the region.  Among the region’s smaller sectors the share working in them in the region is considerably below that in the rest of the state.

In general the Western Region’s jobs profile relies more heavily than the rest of the state on the traditional sectors (Industry, Agriculture and Construction) and local services (Wholesale and Retail, and Accommodation and Food Service) which depend on domestic spending and tourism.  The region’s sectoral jobs pattern is influenced by its largely rural nature.

Fig. 1: Percentage of employment by sector in the Western Region and rest of the state, Q1 2014 (Source:  CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Fig. 1: Percentage of employment by sector in the Western Region and rest of the state, Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Western Region’s share of jobs by sector

This jobs pattern can also be seen in the region’s share of national total jobs in each sector.  In total 16.5% of all jobs in the state are located in the Western Region (Fig. 2).  Agriculture, Industry and Construction are the sectors where the region makes its largest contribution to national jobs.

The region’s share of all Industry jobs nationally has increased very strongly in recent years from 16% in 2007 to its current 19.5%, due to its relatively more stable jobs performance in the region.  The region’s manufacturing strength is a key national asset and a previous blog post on ‘Trends in Agency Assisted Employment in the Western Region’ highlighted the industrial sub-sectors which have driven the region’s manufacturing strength.

The three knowledge intensive services sectors are where the region accounts for its lowest shares of national jobs.  Less than 10% of all Information and Communication, and Financial, Insurance and Real Estate jobs are based in the region and its share of both has declined since 2012.  Not only does the region have low shares in these sectors but it is losing ground.

Fig. 2: Percentage of total employment in the state based in the Western Region by sector, Q1 2014 (Source:  CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Fig. 2: Percentage of total employment in the state based in the Western Region by sector, Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Recent changes in employment by sector

Between 2012 and 2014 half of sectors (7 of 14) experienced jobs growth in the Western Region (Fig. 3).  Agriculture grew most strongly followed by Professional, Scientific and Technical activities next.  Growth in these sectors contributed to the region’s increasing share of self-employment.  Wholesale and Retail and Accommodation and Food Service also grew as this period coincided with an increase in overseas visitor numbers as well as consumer spending.

The Western Region experienced a far greater jobs decline than the rest of the state across many sectors, including knowledge intensive services and public services.  In the case of Information and Communication, employment fell by nearly 16% in the region but it had the fourth largest growth in the rest of the country (5.2%).  The reasons for the Western’s Region poor, and weakening, jobs performance in this high growth potential sector need to be investigated.

Fig. 3: Percentage change in employment by sector in the Western Region and rest of the state, Q1 2012 to Q1 2014 (Source:  CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Fig. 3: Percentage change in employment by sector in the Western Region and rest of the state, Q1 2012 to Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

These key aspects of the Western Region’s labour market should inform the development of the upcoming Action Plan for Jobs for the West, Border and Mid-West regions.  The region’s labour market characteristics should influence which policies are prioritised for the region and the sectors of focus for job creation strategies.

Download WDC Insights The Western Region’s Sectoral Profile and full report ‘The Western Region’s Labour Market 2004-2014’ here

Pauline White

 

Note: The CSO has noted concerns over the impact of the new sampling structure on the employment figures for Agriculture. 

Source: CSO, Quarterly National Household Survey, Quarter 1 2004-2014, special run

 

The Western Region’s Labour Market

The WDC has just published a new analysis of the Western Region’s Labour Market. This is based on a special run of data from the CSO’s QNHS for the period 2004-2014 for the seven-county Western Region. Understanding the region’s labour market is important for effective job creation, enterprise and skills policy.

In 2014 the Western Region’s adult population was just over 600,000 with 350,000 active in the labour force. Its labour force has contracted since 2012, largely because of outward migration, and is characterised by higher part-time, under- and self-employment, for both men and women. These are distinct differences in the nature of the region’s labour market that may point to certain weaknesses which need to be addressed by tailored job creation actions for the region.

Western Regions adult populatin diagram

 

Some of the key findings of the analysis are:

  1. Lower labour force participation in the Western Region: A smaller share of the Western Region’s adult population is engaged in the labour market and therefore economically active. The region’s participation rate in 2014 is 57.7% compared with 60.1% in the rest of the state. As human capital is among the most critical factors for regional economic development, this has negative implications for the region’s economic growth and viability. The higher level of economic dependency, resulting from the larger proportion of the population outside of the labour force, also has important social impacts and increases the need for state transfers.
  2. Higher share of self-employment: The region has a higher share of self-employment (without employees) than the rest of the state – 16.3% of all employment in the region compared with 11.4% in the rest of the state. This increases the importance of policy and supports to facilitate the self-employed to establish and sustain their businesses, such as soft business supports, quality broadband, networking, etc. Many may work from home or are mobile and are engaged in local services and therefore outside the remit of the enterprise agencies. They play a particularly significant role in sustaining rural communities and economies. This role, and their needs, requires further investigation and policy focus.
  3. Higher share of part-time working and recent jobs growth more likely to be part-time: There is a higher degree of part-time working in the region with 25.7% of all jobs in the region in 2014 part-time, compared with 23.5% in the rest of the state. Recent jobs growth has also been more likely to be part-time in the region than elsewhere. While part-time working can play an important role for those with caring and other commitments, the greater share of recent jobs growth in the region that is part-time raises some concerns over the nature of employment and the quality of recent jobs growth. A focus on stimulating more full-time jobs should be built into job creation policy for the region.
  4. Lower employment growth: Employment in the region grew over 2012-2014 by 1.4% but this was less than in the rest of the state (3.9%). The jobs recovery in the region is lagging that elsewhere. Initiatives to stimulate and facilitate job creation in regional locations are required to address the region’s weaker jobs performance.
  5. Declining unemployment influenced by out-migration: Unemployment has declined by 28.4% since 2012 but this has only partially been caused by jobs growth. The greater part is due to the loss of unemployed people from the region, either overseas or to other parts of Ireland. The decline in unemployment in the region has been stronger than elsewhere, leading to its unemployment rate dropping below that in the rest of the state (11.5% compared with 12.1% in 2014), reflecting the significant impact of out-migration on the region’s labour market.
  6. Higher youth unemployment rate: The Western Region has a higher youth (15-24 yrs) unemployment rate, 29.2% compared with 24.6% in the rest of the state. As the region has a lower total unemployment rate, this indicates that youth unemployment is a more serious challenge for the region. High youth unemployment can have very significant long-term impacts, as a period of unemployment at a young age can hinder the person’s career prospects and earnings potential. The needs of young jobseekers in the Western Region should be a key policy priority, nationally and for the region, both to prevent them from falling into long-term unemployment and also to reduce out-migration.

These aspects of the Western Region’s labour market should inform the development of the upcoming Action Plan for Jobs for the West, Border and Mid-West regions. The distinctive characteristics of the region’s labour market profile should influence which policies are prioritised for the region and the sectors of focus for job creation strategies. A new WDC Insights on the Western Region’s sectoral profile will be published in coming weeks.

Download two-page WDC Insights WDC Insights-The Western Region’s Labour Market-April 2015 (PDF 0.2MB)

Download full WDC report The Western Region’s Labour Market 2004-2014-WDC Report March 2015 (PDF 2.5MB)

Pauline White

Trends in Agency Assisted Employment in the Western Region

The WDC has today published a new WDC Insights Trends in Agency Assisted Employment in the Western Region as well as a county profile for each of the seven western counties.

Employment in businesses which have received support from one of the main enterprise agencies, which are usually export oriented, is termed agency assisted employment. The WDC has published its analysis of data on these businesses for the Western Region for 2004 to 2013.

Our analysis has found that:

  • Lower recent growth: There was less volatility in assisted job numbers in the Western Region over the period. Assisted jobs in the region have not grown as strongly as in the rest of the country since growth resumed in 2010.
  • More permanent full-time employment: Recent assisted jobs growth in the Western Region is more likely to be permanent full-time with the share of temporary/part-time jobs lower now than at the start of the period.
  • Concentrated by sector: Assisted jobs in the Western Region are more concentrated by economic sector than in the rest of the state and manufacturing activities continue to dominate.
  • Foreign owned sector driving growth: The strongest recent assisted jobs growth has been in the modern manufacturing and information and communication sectors which are the sectors with the highest shares of foreign ownership. The foreign owned sector has driven recent growth in the Western Region to a greater extent than in the rest of the state.
  • Irish owned sector performing less well: There has been much greater volatility in the Irish owned sector over the ten year period and the region’s Irish owned sector is not showing as strong a recovery as in the rest of the country.
  • Urban concentration: Urban concentration, especially in the cities, is a feature of assisted jobs. The resumption of growth does appear to be spreading across the Western Region to some degree, although Clare and Leitrim have seen no increase in assisted employment.

Agency assisted employment is a key policy tool for job creation and unemployment reduction.  Recent growth in assisted jobs in the Western Region has not been as strong as elsewhere, particularly among Irish owned businesses.  Agency assisted job creation in the Western Region needs to focus on increasing sectoral diversity and strengthening the Irish owned sector.  Addressing the lower levels of assisted employment in the counties of the North West should also be a policy priority.

Download the two page WDC Insights, full WDC Report and/or 7 county profiles here