Regions left behind as Dublin steams ahead
In the small Irish economy there has traditionally been limited data available on economic performance by county or by region.
However, from the data that is available, it is evident that not all regions have shared the same levels of growth, prosperity and buoyancy. In fact some have lagged badly, while others have romped ahead.
A couple of weeks back, the CSO released data relating to 2011 on Gross Value Added by region in the country, and disposable incomes by region and by county. Both measures provide the same picture — an economy where there are significant variations in terms of economic activity levels and incomes.
Gross Value Added (GVA) measures the value of the final goods and services produced in a region, less the materials and services used which come from outside the region.
It is a reasonably good measure of economic activity but the data is not available on a county basis.
The latest data for 2011 shows massive discrepancies between the regions.
Economic activity per head of population in the border, midland and western region was almost 34% below the national average, with the poorest performing region in the country, the midlands, almost 45% lower than the national average.
Dublin was 47.5% above the national average; the South-East was almost 30% below; the South-West was 31.3% above (boosted hugely by the chemical and pharmaceutical cluster in Cork); the Mid-West was 19.4% below the national average; and the Mid-East was 32.6% below.
In terms of disposable incomes per head of population, there are also some very stark findings.
Dublin was the strongest performer, with disposable incomes 11.9% above the national average. Donegal was the lowest, with income levels 16.6% below the national average.
In fact there is a gap of 34.2% between Dublin and Donegal. Only four counties in the country have income levels above the national average — Dublin, Cork, Limerick and Kildare. But before jumping to too many conclusions about how relatively well-off people in some counties are, it is important to take a few issues into consideration.
Disposable incomes are basically incomes left after direct taxation has been paid. Out of that income, essential items such as property tax, the monthly mortgage repayment, and other essential living expenses have to be paid.
When all of these essentials are stripped out, we are left with discretionary incomes, which unfortunately the CSO does not measure.
The reality is that the cost of living in Dublin and the bigger cities is much higher.
For example, house prices are much higher in Dublin, so the monthly mortgage repayment will be higher.
Hence, disposable incomes may give a somewhat inaccurate reading.
However, it is clear that the economic recovery story is much stronger in the greater Dublin area than elsewhere. Perhaps this is a natural phenomenon in any country, where the capital city generally tends to be much more prosperous.
Despite that, people living in the other regional and rural areas need to be given greater consideration in any discussion of economic development policy, particularly in the context of the local government reform that is currently under way.
Over the coming weeks in the run-up to the local and European elections, these messages of gross regional inequality need to be forcefully brought home to both existing and aspiring politicians who will promise the sun, moon and the stars on the doorstep, but who in reality have not delivered very much.
