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The regional economic impact of Covid-19

It will be interesting to see the regional effects of the Covid-19 pandemic and the resultant lockdown.

As Social Justice Ireland has repeatedly pointed out, including in an article on this website last Friday, many parts of rural and regional Ireland have, for too long, been allowed to fall behind the more urban and economically developed parts of the country.

As we navigate the crisis caused by COVID-19, it is likely that rural areas will bear a significant social and economic impact over the medium-term, at least. The challenges that faced rural Ireland prior to the current pandemic remain, and new challenges have emerged, not least the impact of a potentially prolonged period of unemployment on areas that were already struggling.

Some of these challenges have been laid bare in a working paper from the Department of Employment Affairs and Social Protection.

It is well known and widely documented that the Accommodation and Food sector is the area of the economy that will suffer most from the lockdown. A glance at the sectoral breakdown of the Pandemic Unemployment Payment (PUP) reaffirms this. More that one in every five recipients are from the Accommodation and Food sector. The week ending April 24th, more than 90 per cent of the workforce was reliant on either the PUP or the Temporary Wage Subsidy Scheme (TWSS). Only the construction sector came close to this.

FIGURE 1: THE SECTORAL BREAKDOWN OF THE PANDEMIC UNEMPLOYMENT PAYMENT

FIGURE 2: THE SECTORAL DISTRIBUTION OF THE PUP AND TWSS, AND % OF LABOUR FORCE BEING SUPPORTED

The extent to which the economies of different counties differ in their reliance on the tourism sector is then highlighted by the following two graphics. They reaffirm the reliance of the counties of the West coast on the tourism industry, particularly counties like Kerry, Sligo, Mayo, Clare and Donegal. It seems likely that reduced numbers of international visitors in the coming months and maybe years will have a disproportionate impact on these parts of Ireland.

FIGURE 3: A SECTORAL BREAKDOWN OF THE PANDEMIC UNEMPLOYMENT PAYMENT BY COUNTY

FIGURE 4: THE BREAKDOWN (BY SELECTION ECONOMIC SECTORS) OF THE PANDEMIC UNEMPLOYMENT PAYMENT BY COUNTY