Nevin Institute: Recovery almost exclusively concentrated around Dublin

Ireland’s economic recovery is almost exclusively concentrated around Dublin and its hinterland, with stagnation and decline persisting in most other regions.

The two-tier nature of Ireland’s post-crash economy was highlighted by the Nevin Economic Research Institute (Neri) in its latest quarterly economic bulletin.

The trade union-funded think tank said 94 per cent of the 29,000 new jobs created in the economy last year were in the eastern part of the country centred on the greater Dublin area. At the same time full-time equivalent (FTE) employment declined in the West (Galway, Mayo and Roscommon) and the Border county regions, and stagnated in the southwest (Cork and Kerry).

The institute said whether this constituted a permanent shift in the structure of Ireland’s economy or merely a recovery lag between regions has yet to be determined.

However, it noted that the divergent trends reflected a process of internal migration for economic purposes towards the east coast, which was resulting in pent-up pressure on housing and rents in the capital.

Nonetheless the group’s report paints a relatively positive picture of recovery in general, suggesting it was being underpinned by improvements in the labour market, exports, domestic demand and earnings.

The group is forecasting economic growth of 3.4 per cent in gross domestic product (GDP) terms this year, marginally declining to 3.1 per cent in 2016.

It predicted unemployment would fall to 10 per cent in 2015 and to 9.1 per cent next year.

Its report analysed the distribution of earnings within the economy and, in particularly, the incidence of low pay with a view to monitoring trends.

Hourly wage

It found 25 per cent of employees, which equates to about 345,000 people in the labour force, earn an hourly wage of less than the living wage threshold of €11.45 per hour.

Some 60 per cent of low-paid workers are women, the report said, with female workers facing a 34 per cent risk, essentially one in three, of being low-paid.

Of all those who are low paid almost one-quarter are in the wholesale and retail sector, with 17.1 per cent in the accommodation and food sector.

The report found that while 38.8 per cent of employees in the private sector were classified as low-paid, the corresponding figure in the public sector was only 10.5 per cent, a finding which is likely to reignite the public-private sector pay debate.