Dublin’s central position in Ireland’s economy – and its increasing lead in this regard on the national average – is clearly underlined by the latest figures on country and regional incomes from the Central Statistics Office (CSO). Such is the dominance of the capital that it accounts for more than a third of all jobs in the State – Cork was second at 12 per cent – with the rest trailing far behind.
Disposable income per person in Dublin also remains well above the national average, while poorer parts of the country have incomes less than 80 per cent of the average.
These figures carry clear messages about the way the State is developing, and have key policy implications.
1. Spending power: Disposable income is the money people have to spend on goods and services after paying tax. The bulk of this income in all parts of the State comes from wages and salaries, though social transfers – unemployment payments, pensions, and so on – are also important. Not surprisingly, Dublin has the highest disposable income at €32,393 per person, which is 14 per cent above the national average of €28,370, up 1.3 per cent from 2022. The CSO points out that Dublin is the only county where disposable income is significantly above the State average. Cork – at €29,875 per person is second highest, while Carlow, Limerick, Tipperary and Galway are also above the average. Longford and Laois are the poorest in terms of disposable income per capita, 22 per cent below the State average, while Donegal is 18 per cent behind.
These figure need to be put into context. The rise in disposable income for most in 2023 over 2022 would have been eaten away by inflation, while the data, by definition, does not tell us anything about wide variations in each area between those who did best and worst. Also, the cost of living in cities, particularly Dublin, is higher and so disposable income does not go as far.
Nonetheless, the figures show the huge spread of income across the State and a gap of around €10,000 per head in annual disposable income between the richest counties and the poorest. This also takes into account social transfers, which account for a higher proportion of income in the less well-off areas.
Another way of looking at the figures is to consider the total disposable income in each region of the State. As well as disposable income per head, this is influenced by the number of people living in each region and the proportion of those at work.
Total disposable income in the Dublin region came in at €48.6 billion last year, close to one third of the total for the State as a whole. Next came the southwest – Cork and Kerry – at €27.1 billion, and the mideast at €20.4 billion. Incomes in the mideast region “have been steadily increasing since 2013 and have risen by 10 per cent again this year from 2022”, the CSO notes, also noting the central roles of counties Meath and Kildare. These commuter counties have increasing numbers of people working in Dublin who can’t afford to live there.
In this sense the economic concentration is even greater. Some 35 per cent of employment is in Dublin, followed by 12 per cent in Cork. “Both counties are outliers with respect to the rest of the country,” the CSO notes, with Galway coming next, accounting for 6 per cent of all employed people nationally, Limerick at 5 per cent and Waterford at 2 per cent. Not surprisingly, counties with a lower employment level – such as Carlow, Donegal and Tipperary – have a heavier reliance on social transfers as a source of income.
Finally, we can look at gross value added, an estimate of the extent of what is produced in a region, where results are similar enough to GDP. These figures are distorted by multinational accounting but show that 45 per cent of gross value added is accounted for in Dublin and 27 per cent in the southwest. Dublin’s big industrial and tech base and the presence of big pharma plants in Cork are key here.
2. Longer-term trends: A real value of these figures is in revealing longer-term trends. These show the increasing dominance of the two big cities over the years, and particularly of Dublin. Since 2015, total disposable income earned in Dublin has risen by 86 per cent and in Cork by 83 per cent. The mideast figure is up by 66 per cent, benefiting from the spillover from Dublin and from a few big industries located in the commuter county boundaries.
In contrast most of the other regions have seen rises slightly over 50 per cent – still growth, but the gap between Dublin and the rest of the country is growing, drawing more and more people and more economic activity into the region. To an extent the rising tide has lifted all boats and the IDA now works to locate more projects outside Dublin. But the biggest employers and players still tend to cluster around the eastern region, and, in the case of pharma and chemicals in particular, also around Cork.
While the total disposable income in Dublin is driven by a rising population, incomes per head have also risen faster in the capital in cash terms, up more than 70 per cent in the past decade compared to a population average in the mid-50s. To judge the impact of this on living standards would require an assessment of relative costs across the State and the pace at which they are rising.
3. Policy questions: National policy has tried to strike a balance, recognising the position of the main cities while trying to spread development across the State, for example by instructing the IDA to focus on locating new projects outside Dublin, where greater supports are available. Almost 60 per cent of new FDI projects last year were outside the capital. But the bulk of economic activity is still accounted for by the eastern and south-western regions.
Ireland faces the familiar challenge of a congested Dublin region, urban sprawl in commuter counties – inadequate housing and public transport on one side and depopulated and less well-off regions on the other.
The key Government document in terms of policy in this area is the National Planning Framework, published in 2018 and now being updated, with a new finalised version due this summer. Referring to recent development patterns and the focus of population and economic growth in the east, the final draft of this document states: “We cannot let this continue unchecked.” It proposes a roughly 50:50 distribution of growth in the years to 2040 between the Eastern and Midland region on one side and the Southern and Northern and Western regions on the other, “with 75 per cent of the growth to be outside of Dublin and its suburbs”.
[ Disposable incomes in Dublin 14% higher than national average, CSO research showsOpens in new window ]
This will be difficult to achieve in light of trends in recent years and the goal of ensuring 40 per cent of future housing development is within existing built-up areas, to promote the idea of more compact and “denser” growth with people living in smaller homes closer to city and town centres.
There are a few key challenges here. One is how to cope with the dynamic of growth in the east and whether by aiming to have more people living in other parts of the country, planning rules would restrict vital housing provision around Dublin. Already there appears a shortage of zoned land for building in some areas around the wider eastern region, and some experts argue that planning rules implemented by local authorities should allow more building close to Dublin, while also seeking to encourage development elsewhere.
The second challenge is how to accelerate development in the regional cities to act as counterweights to Dublin, at least to an extent. Significant investment in infrastructure, transport and education would be needed as well as strategic thinking. For example, development of offshore wind energy could provide new opportunities and income to ports and cities in regional Ireland.
The third key issue is seeking to develop the parts of the State which are lagging behind, notably parts of the Midlands, West and Border counties. Many of these areas rely on agriculture and food – and parts on tourism – but lack a wider industrial base. Given the desire of big companies to locate close to cities where they can recruit staff easily, the old concept of the IDA finding a factory for a regional location may only go so far.
