Recession had already hit parts of country over a decade ago – ESRI

LARGE chunks of Ireland entered recession a whole six years before the country as a whole, according to new research.

Both the South East and South West went into recession more than a decade ago, according to new research from the Economic and Social Research Institute (ESRI).

The think tank said output in the two regions began to shrink from 2002 onwards, even though the country didn’t officially hit recession until 2008.

“They were in recession while the rest of the country still boomed,” the ESRI said, in a note by research professor Dr Edgar Morgenroth.

The ESRI shows the onslaught of the recession was uneven, just as the recovery is creating a two-tier economy.

The analysis in ‘Two-Speed Recovery? Spatial Development in Ireland’ confirms that the recent pattern of economic recovery has not been evenly spread across the regions.

Ireland mirrors many developed countries, where growth is led by urban areas.

Dr Morgenroth noted that “higher levels of per capita output are recorded particularly in the Dublin and South West regions.

“Employment has grown more in commuter regions … which suggests that there is some positive spillover into neighbouring regions from the stronger economic performance of Dublin and Cork.

“This analysis points to significant differences between regions, linked to their economic activities and scale of urban development,” he added.

As of 2011, the Midlands, Mid-East and Mid West regions had not recorded any GVA growth, whereas the Border, Dublin, South East and South West regions had.

It suggests that Government policy should focus on spreading economic development out from urban centres, while reducing sprawl.

Economic growth in the regions is measured by Gross Value Added (GVA), which gauges the value of goods and services produced in a specific area, industry or sector of an economy. It is used in estimating GDP.

Dublin, the Midwest and Mid-East peaked in terms of per capita real GVA in 2007.

But the Border, Midland and West regions peaked the year before, suggesting the recession started earlier in those regions, the think tank said.

The South East and South West experienced a reduction much earlier – from 2002.

The latest GVA figures are for 2011, so the ESRI said they are of limited use in determining how the regions are recovering.

However, the ESRI data shows that between 2007 and 2010, per capita real GVA dropped by 12.8pc nationally.

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