In this latest report, Dr Luke McGrath, Economist with the WDC Policy Analysis Team, examines trends in disposable incomes across our region based on CSO data. The CSO release provides official estimates of county-level disposable household income (gross household income less total tax, social insurance contributions & inter-household transfers paid) for 2020 as well as a preliminary estimate for 2021. The preliminary estimates are often subject to sizeable revisions thus the focus of the analysis is on the official estimates from 2000-20.
The relative decline in disposable incomes across the Western Region counties is of concern. While incomes in the Western Region have grown, they are not increasing at the same rate as in other counties. Speaking about the analysis Dr Luke McGrath said
The dual shocks of COVID-19 and Brexit have exacerbated pre-pandemic structural issues in our region that future policy must address through the reduction of regional infrastructure deficits and broader support for the ‘3Es’ of enterprise, employment, and education to enable regions to make the most of their assets. Given low levels of historical investment there is a clear need to improve regional connectivity and accessibility. A key constraint for regional entrepreneurs is the lack of physical and digital infrastructure.
However, the analysis does offer some positive developments.
In 2020, two Western Region counties (Donegal & Mayo) were in the bottom ten. This represents an improvement from the 2013- 19 period where it was typical for four Western Region counties to be in the bottom ten, with as many as five in 2016.
The income falls during the recession took over a decade to recover from. By 2018, Sligo and just 6 other counties (Dublin, Cork, Kerry, Kildare, Limerick & Wicklow) held nominal disposable incomes at or above their 2008 level. By 2019, Donegal, Mayo, & Sligo and by 2020, Galway, Roscommon & Leitrim reached or exceeded their 2008 levels. Even in 2020, 4 counties (none in the Western Region) still held nominal disposable income per person below their 2008 level (Wexford, Longford, Laois & Cavan)
Slower growth has meant a general divergence from the national average across the Western Region since 2011. However, from 2014/15 to 2020 there was an improvement in Sligo, Roscommon, and Clare.
Regional income imbalance was least in 2010 when all parts of the country were significantly negatively affected by the recession. This highlights some of the complexities that surround the issue of regional inequality. Between 2000-20 regional income imbalance was at its lowest at a time when incomes fell sharply across the Western Region but just at a slower rate than the national collapse thus this could hardly be championed. From a regional development perspective, we would much rather see regional imbalances closed through regional growth outpacing national growth i.e., incomes would still be rising across the country.
It should be noted that some of the divergences from the state average is a result of sharp growth in Dublin pushing up the national average. While there has been a general divergence from the State average in monetary terms, some Western Region counties have improved their relative rankings, considerably. Leitrim improved from 21st to 14th and Sligo from 19th to 13th from 2000-20.
