Tuesday 20 March 2018

The facts don't lie: ­ Ireland's two-speed economy in numbers

Alan McQuaid
Alan McQuaid
Paul Melia

Paul Melia

It may have been water which focused voters' minds at the ballot box, but part of the underlying anger against the Fine Gael/Labour coalition was undoubtedly a sense that a two-speed economic recovery is under way.

Nationally, the statistics play out well. Average incomes are up, unemployment has dropped and new car sales are on the rise. More houses are being built, and all the signs point to a recovering economy.

And it was these statistics which the outgoing government seized upon. Here was proof, it claimed, of its careful economic management. But the people thought otherwise.

That's because when you drill down into the figures, a different story emerges. An analysis of data shows there is a big gap between the counties which are performing well, and those which are not. The rising tide is not lifting all boats.

"While there has been a national increase in income per person, this was experienced most in the large urban areas of Dublin, Cork, Kilkenny and Galway, but also in Longford, Sligo and Offaly, which all have more than 5pc growth," Dr Mick Kerrigan from the Data Science Team said.

"Other areas like Carlow, Leitrim and Limerick are experiencing much more modest increases under 2pc. Donegal is the only county to experience negative growth of minus 0.4pc in the period."

The research shows that the average income per person across the country is €23,203. The highest is, unsurprisingly, in Dublin at €30,061 - almost 30pc above the national average.

This compares with bottom-of-the-pile Donegal at €18,765. Even accounting for higher living costs in the capital, it's a stark difference.

Along with Cavan, Leitrim, Louth, Monaghan and Sligo, Donegal is classified as being part of the border region. Only Sligo has seen a rise in incomes above the national average. Some of the lowest growth rates nationally are along the border counties, with incomes up an insignificant 0.4pc in Monaghan - the lowest level of growth in the four years examined.

The mid-west region of Limerick, Clare and North Tipperary is also ailing. Nor are the south-east counties of south Tipperary, Waterford, Wexford and Carlow seeing an upturn. Only Kilkenny performs above the average.

And when other economic indicators are explored, such as sales of new cars and housing output, more differences emerge.

In Dublin, the biggest market, car sales were up 56pc from 27,710 in 2011 to 43,310 last year.

But they have fallen in south Tipperary, albeit from a low base, with just single-digits rises in Limerick and Longford. In most counties, growth is below the average.

Housing also tells a story. While the lack of output has been way below the level needed to meet demand, some 12,666 units were completed last year, up 21pc on 2011.

But look at where the sharpest rises are - Dublin, the commuter counties of Kildare, Wicklow and Louth, and Cork City - all areas of high demand.

While unemployment rates are falling, the drops differ by region with the border, west and south-east regions faring worst.

Chief economist with Merrion Capital, Alan McQuaid, said the urban-rural divide was "massive".

"There's no doubt about it, there's definitely a two-speed recovery. Until you have major employment sources in these counties, it's very difficult for them to thrive," he said.

"They need big employers. Leixlip (in Kildare) has Intel and you need to attract those guys… but broadband penetration is a huge issue. If you can't get a signal on your phone, why would multinationals go to those places?

"Kerry will always benefit from the Rose of Tralee, and west Cork from the sailing. Galway is a great place to be, and tourists will always come to these places, but there's other counties where they won't."

The sense of a divided Ireland is borne out by the RTÉ/Behaviour and Attitudes Exit Poll conducted on election day. Asked if they believed the economy was in better shape than a year ago, 51pc of urban dwellers said 'yes' compared with 36pc of rural voters. When questioned as to whether their personal finances had improved, those in rural areas were more likely to say 'no'.

And voters in Munster and Connacht-Ulster were most likely to state they were worse-off, reflecting what the statistics are saying.

Paul Melia, Environment Editor

Indo Review

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