2017 South East Economic Monitor shows a region being left behind

Business
Download the report at  <a href=

Download the report at https://www.wit.ie/witsoutheastmonitor

Absence of IDA support jobs, low Enterprise Ireland activity, low higher education capacity attributed to why South East economy is in relative decline

The 2nd annual South East Economic Monitor released on 1 July) has found that while the South East economy is growing; it is doing so much more slowly than the state and the other eight regions of Ireland. As a result, the region is in relative economic decline.

The South East Economic Monitor tracks key economic indicators, capturing data on the economy of the five counties of the South East (Carlow, Kilkenny, Tipperary, Waterford and Wexford); a region with 10.7% share of the national population.

It has been prepared by academic faculty in the Waterford Institute of Technology (WIT) School of Business, Dr Cormac O’Keeffe, John Casey and Dr Ray Griffin.

Action Plan for Jobs target

While there has been a drop in unemployment the south east is the only region not meeting the Government’s Action Plan for Jobs target.

The region has experienced a large drop in unemployment (from 12.5% in Q1 2016 to 9.3%) with 9,900 net new jobs - the first time unemployment is below 10% in eight years.

Dr Ray Griffin, lecturer in strategy, says that the improvement in unemployment masks significant relative economic decline. “The South East is the only region (of the eight) not meeting Government’s Action Plan for Jobs target (to have regional unemployment less than 1% of national rate). There is very little variation between the counties in the region.”

Dr Griffin added that the government’s Action Plan for Jobs commitment to bring every region’s unemployment rate to within 1% of the national average has been achieved everywhere but the South East. "We cannot see any Government action aimed at closing that gap," he says.

No plan to turn economy around

Lecturer in finance and economics, Dr Cormac O’Keeffe says that the national policy approach is focused on the crisis being over; the economic crisis is still unfinished business in the South East. “The South East region is home to 10.7% of the national population, yet it is clear there is no plan to turn the regional economy around,” he says.

“Low income, low skills jobs are driving the employment growth; it is pretty simple, the good jobs lost in the recession are being replaced by poorer jobs,” Dr O’Keeffe continues.

The quality of jobs in the South East is dramatically lower than the national average, and there is no evidence of this improving. This means incomes, disposable income and consumption in the South East is lower than the rest of the country.

John Casey, lecturer in the Department of Accounting & Economics notes that nationally it is clear that the agencies charged with economic development, IDA and Enterprise Ireland, are underperforming with regards to the South East.

“They now have specific objectives to promote a more regional distribution to their activities, however we do not see any evidence of this in the South East. We can see what these highly effective organisation can do when they put their mind to it. They need to give more support to their regional offices and target this gap in their activities,” he says.

Education

The publication also explores higher education capacity.

Casey adds that the South East’s economy will not get back into step with the rest of country while there continues to be a cap on higher education capacity. “Investment in higher education is key to closing the gap by raising job quality and supporting the IDA in bringing knowledge economy jobs into the region. It beggar’s belief that €1.7bn was spent on new university buildings over the past five years, and not one of these state supported investments was made in the South East. As currently proposed, the technological university will not add any educational capacity unless it is accompanied with significant investment to address the deficit caused by many years of under-investment.”

Download the report at https://www.wit.ie/witsoutheastmonitor


How the counties compare

Carlow 

Despite steady decreases in the Live Register in Carlow (17.1% year-on-year decrease), Census 2016 shows that Carlow had the third highest rate of unemployment in the country. Carlow is home to 1.2% of the population of the State but to 1.6% of those on the Live Register. Since 2003 Carlow has received less than 0.3% of IDA visits and this has resulted in the county falling well short of its fair share of IDA jobs. From 2011-16 the IDA created 51,793 net jobs. Carlow accounted for 0.9% of these net additional jobs despite being home to 1.2% of the Irish population. Carlow currently has one-third of the IDA jobs that it should have based its population. There is also evidence of low job quality as the returns for taxes on work (PAYE, USC, and self-employed taxes) in Carlow are 54% of what one would expect based on population share. 

South Tipperary 

Despite steady decreases in the Live Register in Tipperary (16.3% year-on-year decrease), Census 2016 shows that unemployment in Tipperary remains above the State average. South Tipperary is home to 1.86% of the population of the State but 2.2% of those on the Live Register. South Tipperary continues to receive less than its fair share of IDA jobs. From 2011-16 the IDA created 51,793 net jobs. Based on population shares, South Tipperary could have expected to have secured 963 of these jobs. Instead, there was a net loss of 646 in South Tipperary. South Tipperary currently accounts for only 1.5% of IDA jobs despite being home to 1.86% of the Irish population. Despite this, Tipperary (North and South) only received 0.9% of IDA visits in the last decade despite being home to 3.4% of the Irish population. There is also significant evidence of low job quality as the returns for taxes on work (PAYE, USC, and self-employed taxes) in South Tipperary are 38% of what one would expect based on population share. 

Kilkenny 

There was an impressive decrease in the Live Register in Kilkenny (18% year-on-year decrease). However, there are serious concerns relating to the lack of high-quality job creation in the county and Kilkenny continues to receive less than its fair share of IDA jobs. From 2011-16 the IDA created 51,793 net jobs. Kilkenny accounted for a mere 0.58% of these net additional jobs despite being home to 2.08% of the Irish population. Despite some encouraging increases in IDA visits in the last two years and some positive job announcements in 2016, Kilkenny currently has less than one-fifth of the IDA jobs that one would expect based on its population. There is also evidence of low job quality as the returns for taxes on work (PAYE, USC, and self-employed taxes) in Kilkenny are 72% of what one would expect based on population share. 

Waterford 

Despite steady decreases in the Live Register in Waterford (14.5% year-on-year decrease), Census 2016 shows that of the cities, Waterford City had the highest unemployment rate at 18.8%. The rate of unemployment in the county as a whole was 15.4%, the eighth highest in the country and significantly higher than the State average of 12.9%. Waterford accounted for more than one in nine of the unemployment blackspots in the country (areas with more than 27% unemployment rate). Waterford is home to 2.4% of the population of the State but 3.3% of those on the Live Register. Despite some welcome successes in 2016, Waterford continues to be home to less than its fair share of IDA jobs. From 2011-16 the IDA created 51,793 net jobs. Waterford accounted for a mere 0.14% of these net additional jobs despite being home to 2.44% of the Irish population. Despite this, the number of IDA visits to county decreased significantly in 2016 to 17, from 31 in 2015. There is also evidence of low job quality as the returns for taxes on work (PAYE, USC, and self-employed taxes) in Waterford are 58% of what one would expect based on population share. 

Wexford

Despite steady decreases in the Live Register in Wexford (14.3% year-on-year decrease), Census 2016 shows that Wexford had the fifth highest rate of unemployment in the country. Wexford is home to 3.1% of the population of the State but 4.5% of those on the Live Register. Wexford continues to receive less than its fair share of IDA jobs. From 2011-16 the IDA created 51,793 net jobs. Wexford accounted for a mere 0.47% of these net additional jobs despite being home to 3.14% of the Irish population and Wexford currently accounts for a mere 1.31% of IDA jobs. Despite this, Wexford has only received 0.5% of the IDA visits in the State since 2009. There is also evidence of low job quality as the returns for taxes on work (PAYE, USC, and self-employed taxes) in Wexford are 41% of what one would expect based on population share.


Featured News