Skip to main content
  • For Western counties, the policies to support household incomes and firms while restrictions remain in place are essential.
  • In the short term, an approach that prioritises liquidity supports for firms, income supports for workers, and, above all, job retention is warranted.
  • Active labour market programmes, including retraining where appropriate, will play an important role in helping to address the ‘re-employment’ challenge.

On Friday 23rd October, The Central Bank published an Economic Letter written by Luke McGrath from our Policy team and Reamonn Lydon entitled “Regional impact of COVID-19: Western Region & Atlantic Economic Corridor”. The report looks at the labour market impact of COVID-19 in the region. It shows the crucial role played by policies such as the Pandemic Unemployment Payment (PUP) and Employment Wage Subsidy Scheme (EWSS) in supporting household incomes and firms in the Western Regions.

The analysis in “Regional impact of COVID-19: Western Region & Atlantic Economic Corridor” will assist policy makers in planning for economic recovery at a regional level. The regions examined in the Letter includes Clare, Donegal, Galway, Kerry, Leitrim, Limerick, Mayo, Roscommon and Sligo.

The regional dynamics of the COVID-19 labour market shock are influenced by pre-COVID employment patterns and structural factors. In particular, in Atlantic Economic Corridor (AEC) counties, there is a concentration of employment in tourism, traditional sectors, and public services. The policy response to COVID-19 provides essential support to Western counties. Workers in AEC counties are more likely to work in very small firms which may find it more difficult to adjust and be resilient to the COVID-19 shock, in terms of liquidity and cost management.

At the April peak, Kerry and Donegal had almost a third of their labour force in receipt of the PUP. Prior to the most recent restrictions, in early October, the same counties have also seen the largest percentage decline in PUP, with large numbers flowing onto wage subsidy supports. Early signs from the reintroduction of restrictions in September suggest a reversal of this pattern for the region. For Western counties, the policies in place to support household incomes and firms while restrictions remain in place are essential.

Rising unemployment and fewer job openings has led to a large rise in the number of unemployed persons per job posting (data from Indeed). This ratio is an important indicator of the scale of the ‘re-employment’ challenge. Nationally, the ratio has increased from three unemployed persons per job posting pre-COVID-19, to 14 by September 2020. In AEC counties there were 22 unemployed persons per job posting in September 2020.

The Letter concludes that caution should be urged in inferring that the challenge of the recovery from the COVID-19 crisis will be based purely on short to medium term COVID-19 exposure. The structural issues discussed in the Letter will play a key role in the recovery.


Notes to editors

  • This Economic Letter on the Western/AEC region was co-authored with the Western Development Commission.
  • The full series of Economic Letters can be found here.
  • The data are yet to reflect the most recent restrictions introduced in October, and we expect unemployment to rise in the short-term.  If increases reflect previous regional patterns – with larger numbers in particular in the likes of Donegal, Kerry, Mayo and Leitrim – this could exacerbate some of the regional differences highlighted in the Letter.