New WDC report on Travel to Work Patterns in the Western Region

The Western Development Commission (WDC) will shortly publish a new report on Travel to work patterns in the Western Region. Travel to Work and Labour Catchments in the Western Region, A Profile of Seven Town Labour Catchments (2018) which will be available for download here.

In this publication, the WDC draws on Census 2016 POWCAR data to examine the travel to work patterns in centres with a population greater than 1,000 across the Western Region. The analysis, undertaken by the All Island Research Observatory (AIRO), identifies 42 labour catchments ranging in size from the largest, Galway City, with over 70,000 resident workers, through to centres with fewer than 1,000 resident workers.

The report also contains a detailed labour market profile of the principal towns in each of the seven counties of the Western Region, namely: Galway, Ennis, Sligo, Letterkenny, Castlebar, Roscommon and Carrick-on-Shannon. Trends are also examined, drawing on the original travel to work analysis based on Census 2006 conducted by the WDC.

The report notes some key findings:

  • All seven town labour catchments have significantly more people at work than the resident population of workers in each town as identified in the Census. They therefore have access to a larger labour supply. For example, Galway city labour catchment has a population at work more than double the Census population of resident workers, while Carrick-on-Shannon labour catchment has a population at work approximately 4.6 times the population of resident workers.
  • Compared to a decade earlier the seven county town labour catchments account for an increase of only 0.5% in the to­tal share of the population at work and living in the Western Region. This shows the limited change that has occurred over a long period and the need for very strong policy intervention to effect change.
  • The analysis highlights the importance of rural areas (centres with less than 1,000 persons) as employment locations. Generally over one fifth (in excess of 22%) of those living in the town labour catchment are employed in rural areas. The highest level of rural employment is in the Ennis labour catchment with over one quarter (26.9%) employed in the Clare rural area.
  • North-east Donegal is strongly linked to Northern Ireland. The ‘Derry Rural’ labour catchment accounts for over 5,000 resident workers, an increase of approximately 10% since 2006. This region will be most impacted by BREXIT, therefore policy needs to be developed and implemented to mitigate the impacts.

There are two outputs;

  • the full report, provides an overview of the travel to work analysis, identifies the 42 labour catchments, and provides an overview of change between 2006 and 2016. It contains the detailed labour market profile of the principal towns in each of the seven counties of the Western Region (Galway, Ennis, Sligo, Letterkenny, Castlebar, Roscommon and Carrick-on-Shannon).
  • Individual bulletins containing only the labour market profile of the principal towns are also available.

These reports will provide information for prospective employers, develop­ment agencies and regional and local authorities. These data can also be used in determining catchments for various services which will be of interest to transport providers, planners and local authorities. The outputs of the report will also be a useful evidence base for researchers and planners en­gaged with the Regional Spatial and Economic Strategies (RSES) for both the Northern and Western Region­al Assembly (NWRA) and the Southern Regional Assembly (SRA) and also for Project Ireland 2014, the National Planning Framework (NPF).

 

 

Deirdre Frost

 

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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.

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New research on Economic & Social Impact of the West of Ireland creative sector

National University of Ireland, Galway has recently published a series of reports ‘Economic & Social Impact Assessment’ of the creative sector in five different regions across Europe’s Northern Edge including the West of Ireland.  The five reports are available to download here:

Funded through the EU Northern Periphery & Arctic (NPA) Programme co-funded ‘a creative momentum project’, the research was conducted by Dr Patrick Collins, Dr Aisling Murtagh and Dr Ben Breen of NUIG’s Whitaker Institute and Discipline of Geography. The WDC is lead partner for this transnational project.

Silvia Guglielmini, WDC; Aisling Murtagh, NUIG; Pat Collins, NUIG; Pauline White, WDC; Leo Scarff, Leo Scarff Design at the launch of the West of Ireland Economic & Social Impact Assessment

As the report states, assessing the value of the creative sector (defined in the report as Advertising, Animation, Architecture, Craft, Cultural Facilities, Design, Film, Games, IT and Computer Services, Marketing, Music, Performing Arts, Photography, Publishing, Radio, Software, TV and Visual Arts) is a complex task.

Combining existing knowledge and official statistics, with survey data (152 respondents made some reply to the online survey) and in-depth interviews with nine creative sector entrepreneurs from the region, the impact assessment presents key economic estimates but also goes beyond traditional economic measures to encompass a wider socio-economic focus.

Economic Impacts

Sales

Total direct sales of the creative sector in the Western Region amounted to €486.2 million in 2016. Making use of a multiplier, the researchers derived a total value of the sector to the Western Region of €729.2 million.

Average company sales differ across sub-sectors. The sub-sector which the researchers designate as ‘creative industries’ (Media/Advertising, Architecture/Design, R&D, Professional Services, Software & App Development) reports average sales close to twice that of enterprises in the ‘craft industries’ (Traditional Craft, Print & Recorded Media Production, Electronic Manufacturing, Other Manufacturing) and ‘cultural industries’ (Performing Arts & Education, Publishing, Film & TV).

Exports

46% of survey respondents derived some portion of their sales from exports. Across the sector this accounted for 18% of direct sales or €87.4 million. Smaller and younger companies were least likely to export their produce.

Length of establishment

The sub-sector which the researchers designate as ‘creative industries’ is the youngest sub-sector with more than half of operations surveyed less than five years old and close to 10% had been in existence for less than one year.

Employment

The analysis found that the overall creative sector in the Western Region consists of a large number of small and micro enterprises with an average of 2.6 employees per firm.

Official statistics from the CSO indicate that a total of 12,871 people were employed in the sector in the Western Region in 2015. The largest sub-sector was ‘creative industries’ (57.3%, 7,380) followed by ‘cultural industries’ (30%, 3,847) and ‘craft industries’ (12.7%, 1,644). Geographically, employment was concentrated in counties Galway (22%), and Donegal (18%).

The results of the survey suggest that employment in the overall creative sector grew in recent years. Employment in ‘cultural industries’ increased by 2.3% (2012-2015) while in ‘creative industries’ there was stronger growth of 15.8%. ‘Craft industries’ however showed no significant change.

Infographic of the Economic Impacts of the creative sector in the West of Ireland.

Social Impacts

The report authors note that studies have found the creative sector has a range of wider benefits and spill-over impacts. Such benefits are difficult to measure precisely, but their assessment suggests the contribution is significant. A range of wider socio-economic contributions from the creative sector in the Western Region are examined in the report:

Place-based impacts

  • The creative sector is locally embedded, facilitating strong local economy value capture. But it is also internationally and globally focused, supporting economic growth. The creative sector can contribute to re-inventing perceptions of peripheral regions as attractive, creative places to live, work and visit.
  • The qualities of creative sector entrepreneurs are an asset that facilitate harnessing of local opportunities, such as from place-based resources including culture, traditions, landscape and heritage.

Human and social capital impacts

  • Inter-sectoral mobility of creative labour, as well as strong knowledge transfer to emerging talent and other entrepreneurs, strengthens the human resource capacity of the region.
  • The open and collaborative approach of creative sector entrepreneurs builds a supportive entrepreneurial environment aligned with the concept of ‘coopetition’.
  • Creative sector entrepreneurs also contribute to positive social and community impacts.

Infographic of the Socio-Economic Impacts of the creative sector

To support the consideration of the socio-economic impacts of the sector three case studies are included in the assessment:

  • Festival impacts: Willie Clancy Summer School
  • Arts impacts: Gaeltacht areas in the Western Region
  • Tourism Impacts: Creative and cultural assets

Conclusion

The analysis suggests the creative sector has significant economic and social value in the Western Region of Ireland. It highlights the important role of the creative sector in supporting more balanced, sustainable development in peripheral and rural regions. The sector’s structure, composed of small locally engaged businesses, is an important part of its value.

Placing the creative sector as part of a regional development strategy can support a move away from reliance on service and primary sectors and towards a more diversified economy focusing on new sources of economic competitiveness. Synergies between the creative sector and other indigenous industry sectors, such as agriculture, the marine and tourism, provide avenues for exploration to support future sustainable growth.

The researchers conclude by noting that this is a one off report based on limited evidence. Better evidence can help to identify benefits of particular creative sub-sectors so local agencies can focus on sectors which best address specific local development needs.  To more fully capture the value and needs of the creative sector regularly published official statistics measuring key socio-economic indicators by region and creative sector are needed.

Download the report here

Pauline White

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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 GDP and 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 GDP 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.

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Educational attainment in the Western Region

A recently published ESRI Research Bulletin, ‘The local factors that affect where new businesses are set up’ summarises their analysis of new firms setting up in Ireland.  Data from the Department of Business, Enterprise and Innovation (DBEI) on the number of start-up firms each year in 190 localities, all outside of the Greater Dublin Area, is linked to data on local characteristics thought to be important to business location. This data is used to develop models of how much each factor (or combination of factors) contributes to the number of business start-ups in a given place and time.

The authors state that the results of this analysis show that

‘Educational attainment of local residents is highly attractive to start-ups; we use the share of the population with a third-level qualification as an indicator for this, and it has the largest effect of the factors in our models.’ 

The analysis also shows that broadband access is a significant factor

However, a key finding is that broadband’s effect on start-ups depends on the education level of an area’s population. Only areas with enough highly qualified staff seem to enjoy a boost in start-ups when they have broadband network access.’

This analysis clearly points to the importance of human capital in the location decision of new business start-ups. Of course the direction of causality is a challenge, new businesses are attracted to areas with a highly skilled population, but highly skilled people will only remain/move to an area if suitable job opportunities exist.

The latest WDC Insights, published by the WDC last week (27 March), ‘Census 2016: Education Levels in the Western Region’ is therefore very timely, as it examines the level of educational attainment of the adult population of the Western Region and its seven counties.

Highest level of education completed

Overall, the Western Region displays a lower educational profile, with a smaller share of its adult population (aged 15+ years and who have ceased education) having third level qualifications and a greater share having low levels of education (Fig. 1) than the rest of the state.  13.4% of adults in the Western Region have only completed primary education compared with 11.1% in the rest of the state.  The region’s older age profile contributes to this.

At the highest levels of education the difference between the Western Region and the rest of state is quite substantial e.g. 8.5% in the Western Region have a postgraduate degree/diploma compared with 11.7% in the rest of the state. Given the importance of third level education for business location and stimulating overall economic growth, this presents a challenge for the region.

Fig. 1: Percentage of population (aged 15+ years and whose full-time education has ceased) by the highest level of education completed in the Western Region and rest of state, 2016. Source: CSO, Census 2016 Profile 10 – Education, Skills and the Irish Language, Table EA003

Highest level of education completed in western counties

There are significant differences across western counties in the share of the population with a third level qualification (Fig. 2).  At 55.2%, Galway City has the second highest share of residents with a third level qualification (Advanced Certificate/Completed Apprenticeship and higher) in Ireland. It is behind Dún Laoghaire-Rathdown but ahead of Fingal, Dublin City and Kildare. Within the region, Galway County, Clare and Sligo have the next highest shares of third level graduates, illustrating a strong concentration around Galway / Limerick and also in Sligo, clearly showing the influence of larger urban centres.

Donegal has the highest share of its population with no formal education or primary only (21.9%) in the State, with Mayo, Leitrim and Roscommon next highest in the region. This is partly due to greater reliance on sectors traditionally associated with lower qualifications.

In general, the counties offering fewer graduate employment opportunities tend to have weaker educational profiles, with many of those with higher qualifications having left these areas. This presents a double challenge for such areas – the weaker educational profile makes it more difficult to attract new business start-ups, while the lack of suitable job opportunities makes the area less attractive to those with higher qualifications. Often in such areas, it is the public sector (education, health, public administration) which presents the most significant graduate employment opportunities. Stimulating greater demand for highly qualified staff among private enterprise in these areas, as well as supporting opportunities for self-employment is required.

Fig. 2: Percentage of population (aged 15+ years and whose full-time education has ceased) in western counties by highest level of education completed, 2016. Source: CSO, Census 2016 Profile 10 – Education, Skills and the Irish Language, Table EA003

Conclusion

Overall the Western Region continues to display a lower educational profile than the rest of the state. Given the key role of human capital in regional development, this is a significant challenge for the region and in particular more rural counties.  A number of factors including the region’s older age profile and its sectoral pattern of employment – smaller shares working in sectors which demand higher qualifications (e.g. professional services, ICT, finance) and more working in sectors traditionally characterised by lower qualifications (e.g. hospitality, agriculture) – strongly influence its educational profile.

Galway City shows a very different educational pattern however with the second highest share of third level graduates in Ireland. This is both cause and effect of its recent strong economic performance. The sectoral pattern of employment in Galway City differs from the rest of the Western Region with a high share working in ICT and medical devices manufacturing which demand higher qualifications, the presence of NUI Galway is another key contributor.

Download the latest WDC InsightsCensus 2016: Education Levels in the Western Region

 

Pauline White

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Regional Difference, Regional Strategies and a Ratio- employment and residence in towns in Ireland.

The National Planning Framework has a chapter on ‘Making Urban Places Stronger’ which covers settlements from cities to small towns.  In discussing Ireland’s urban structure (p58-59) it looks at population and employment and highlights a ratio of “jobs to resident workforce” as a key indicator of sustainability for a town.  Data is provided (in the NPF Appendix 2) on town population, resident workers and jobs in the town for 200 settlements with a population of over 1,500 people in 2016.  This is the only detailed data provided in the National Planning Framework.  It is useful to look at differences in the ratio across the regions to see if this indicator can help us better understand residence and employment as town functions.

The NPF suggests in the footnote to the discussion of this ratio that:

A ratio of 1.0 means that there is one job for every resident worker in a settlement and indicates a balance, although not a match, as some resident workers will be employed elsewhere and vice-versa. Ratios of more than 1.0 indicate a net in-flow of workers and of less than 1.0, a net out-flow. The extent to which the ratio is greater or less than 1.0, is also generally indicative of the extent to which a town has a wider area service and employment role, rather than as a commuter settlement. (Footnote 22 pg 176).

It suggests that those settlements with a high ratio of jobs to resident workforce are, by reason of accessibility, employment and local services, fulfilling important roles for a wider area.  This, as will be discussed later in this post, is particularly strongly indicated for towns in the North West.  Firstly, however, a scatter diagram (Figure 1) showing town size and the ratio of jobs to resident workers provides a good overview of the data.  For reasons of scale the five cities (Dublin, Cork, Limerick, Galway and Waterford) are not on this diagram but are discussed in more detail below.

Figure 1: Town Size and Jobs to Resident Workers by Regional Assembly Area.

Source: Project Ireland 2040 National Planning Framework, Appendix 2

The very different patterns among towns in the three regional assembly areas is clear in the diagram.  Towns in the Eastern and Midland Region tend to have lower ratios (most less than 1.0) with more workers leaving the town for jobs elsewhere than are travelling to the town.  In contrast towns in the Northern and Western Region, though generally smaller, are more often serving as centres of employment for their wider area.

As the NPF notes in relation to the North West, towns there tend to have ‘more significant employment and service functions relative to their regional and local catchment’ (p 59).  Table 1 below shows the ratio of jobs to resident workers for towns in the three Regional Assembly areas and the Western Region; the differences in the ratios again emphasise the different functions of towns in the Regions.

Table 1: Population, Resident Workers, Jobs and ratio of Jobs to Resident Workers in towns over 1,500 in three Regional Assembly areas and Western Region.

Source: Project Ireland 2040 National Planning Framework, Appendix 2 (Western Region own calculations)

The low ratio for towns in the Eastern and Midland indicates the importance of commuting for many towns and the dominance of the large Dublin City region.  Indeed only 2 towns in EMRA have ratios higher than 1.5.  These are Longford (1.596) and Athlone (1.591) both of which are on the periphery of the EMRA, less under the influence of Dublin, and both have important employment and wider service functions for their hinterlands.  In contrast, 40 towns in the EMRA (just over half) have a ratio of less than 0.5.  In the NWRA area, where there are 44 settlements with a population of more than 1,500,  7 towns have a ratio of more than 1.5 while 4 have a ratio of less than 0,5.  In the Southern Region, with three key cities, a quarter of towns (19) have a ratio of less than 0.5, while 7 towns (9%) have a ratio of greater than 1.5.

Looking at the Western Region (the area under the WDC remit), the overall ratio is very high (1.26) and of the 39 listed 7 have a ratio of more than 1.5 while four have a ratio of less than 0.5.

Cities and Key Regional Centres

Given the focus on the development of cities and a few key regional centres in the National Planning Framework, it is useful to examine the ratios for the five cities and these regional growth centres (Table 2).  Somewhat surprisingly, Dublin City and its suburbs has a ratio of only 0.978 despite being the major centre for the Region.  This is likely to be related to the location of the boundaries of the suburbs and the fact that there is a larger Dublin Region agglomeration which has a spread of job locations and worker flows to towns that are essentially part of a greater Dublin.

As expected, the other four cities have ratios greater than 1.0, with Galway the highest of these (1.302).  Looking at the proposed regional growth centres, Athlone, Letterkenny and Sligo all have high ratios indicating their importance as employment and service centres in their wider hinterlands.  In contrast Drogheda and Dundalk (which are mentioned in the NPF as part of a “Drogheda-Dundalk-Newry” cross border network) both have lower ratios. Drogheda, in particular, has many people travelling to work elsewhere.

Table 2: Population, Resident Workers, Jobs and ratio of Jobs to Resident Workers in Cities and Regional Growth Centres.

Source: Project Ireland 2040 National Planning Framework, Appendix 2, (EMRA towns in purple, NRWA in green and SRA in blue).

 

Patterns of employment and residence in the Western Region

Looking briefly at towns in the Western Region, Table 3 shows the settlements with the highest jobs to resident workers ratios in the Region.  There is no particular pattern relating to town size, but the top five are all ‘county towns’ and have particular local employment and service functions.  Other towns in the top ten often have key employers indicating the importance of employment spread.

Table 3: Population, Resident Workers, Jobs and ratio of Jobs to Resident Workers in ten Western Region settlements with highest jobs to resident worker ratios.

Source: Project Ireland 2040 National Planning Framework, Appendix 2 (NRWA in green and SRA in blue)

In contrast to the towns in the table above, Table 4 below shows the Western Region towns with the lowest job to resident worker ratios.  These are all ‘dormitory’ towns serving Galway, Sligo and Limerick.  These are the only towns in the Western Region which have a ratio of less than 0.5 indicating perhaps, aside from these, a more sustainable region in terms of commuting patterns.

Table 4: Population, Resident Workers, Jobs and ratio of Jobs to Resident Workers in five Western Region settlements with lowest jobs to resident worker ratios.

Source: Project Ireland 2040 National Planning Framework, Appendix 2 (NRWA in green and SRA in blue)

Conclusions

Understanding where people work and where people are most likely to travel to work is essential to our understanding of employment and economic activity in our Region.  The WDC will publish a detailed analysis of travel to work patterns and labour market catchments in the Western Region next month. It is based on data from Census 2016 will also provide a comparison the 2009 WDC study Travel to Work and Labour Catchments in the Western Region which used Census 2006 data.

The use of the jobs to resident workforce ratio in the NPF is interesting.  It is quite a restricted indicator but the variation in the ratio among towns of all sizes and across the different regions serves to emphasise that the individual employment and other characteristics of each town are the key to the town’s pattern of, and opportunities for, development.  Therefore a clear understanding of the functions and areas which each town can develop is important.

For the Western Region, the ratio has served to highlight the importance of towns of all sizes as centres of employment in the region, while in contrast it shows the importance of commuting to many towns in the East.  Thus, there is a need for very different regional strategies in relation to towns in the North West and in areas of other regions where the influence of the cities is not significant.

A strong argument is made throughout the NPF that concentration in larger cities and towns is essential, but this data indicates that, in the Western Region at least, smaller towns often have high jobs to resident workers ratios and they are attracting workers, probably from their rural catchments.  It is therefore important that we consider the case for ensuring a wider spread of employment across towns of different sizes and develop better policies to do so.  If there is too much focus on the largest cities we risk replicating the problems in the East, where many towns have little function other than as dormitories for the cities.

Locating jobs where workers reside, and supporting those urban centres which have important local and regional functions could be a more sustainable approach and perhaps would be easier to achieve than concentrating residence in the largest urban centres.

 

Helen McHenry

 

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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.)

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