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Last month, the WDC released the latest timely economic indicators (TEI)  report to try and assess economic activity in the Western Region and wider Atlantic Economic Corridor (AEC) region closer to real-time.

This TEI set is limited given the lack of detailed and frequently published official economic data at the county level. To address this limitation the WDC provides supplementary ad-hoc reports based on less conventional sources.

The WDC has now released a report using Google Mobility data up to February 13th an update on our previous mobility report

Download the Report here

Summary:  Regional Economic Insights

The previous WDC Google Mobility reports noted a summer spike in mobility, and thus likely economic activity, in the Western Region and AEC and suggested this variation may have been driven by a “staycation” effect. Any “staycation” effect abated from September and thus suggested a contraction in economic activity, even before the National Level 5 (L5) restrictions in October.

The mobility changes in the key categories have been reflected in the official labour market statistics. The Western Region and AEC were found to have been hit comparatively harder by the initial COVID-19 shock, but this regional labour market variation then subsided through the summer reopening phases. The regional dynamics of the COVID-19 labour market shock are influenced by pre-existing employment patterns and structural factors. Those factors suggest the Western Region and AEC are comparatively more exposed to the negative labour market shock of COVID-19.

The October L5 restrictions were less stringent than March 2020 and this was reflected in the mobility data. Retail & Recreation, Grocery & Pharmacy and Workplace mobility through November up until the ease in restrictions during December fell but remained above March levels. the labour market impact broadly followed the regional variation observed during the initial phase of restrictions during March and April.

The eased restrictions during December coincided with a sharp rise in Retail & Recreation, Grocery & Pharmacy and Workplace mobility. There was much less regional variation in mobility during the December re-opening phase compared with the summer. A plausible explanation is that the December mobility increases were driven less by domestic tourism and more by local economic activity.

Following the December L5 restrictions, Retail & Recreation, Grocery & Pharmacy, Workplace and Public Transport mobility fell considerably and suggests large levels of compliance with the public health restrictions. The December L5 restrictions were more stringent than October and again this was reflected in the mobility data in official labour market statistics. During February, mobility levels in these key categories was back at May/June levels. The share of the labour force in receipt of the Pandemic Unemployment Payment (PUP) was also back also back to June levels during January.

In the short to medium term, a worry for the Western Region and AEC is the length and severity of restrictions into the future and highlights the importance of job retention and enterprise survival during periods of restrictions.

In the longer term, the extent of economic recovery will ultimately depend on the ability to enhance productive capacity and grow employment. The WDC argue that Infrastructure, the ‘3Es’ (Enterprise, Employment and Education) and Innovation are the key levers for effective regional development as detailed in WDC (2010) and WDC (2011).

 

The above must be caveated with a recognition that this is an unconventional data set and the WDC does not have access to the number of observations for each county in each category or have knowledge about what “normal” mobility is.

 

The views expressed here are those of the author and do not necessarily represent or reflect the views of the WDC

Luke McGrath
Economist