The Irish Economy is Booming and All is Going Well

There are number of ways to measure the health of the Irish economy; the one I’ve used here is the level and trend in commercial vacancies.  The focus is the real economy and basically what we would all see in our everyday lives. 
The top five key findings of the Geoview report are
  • National Commercial vacancy rate rises to 13.3%
  • 28,063 commercial units vacant
  • 18 counties increase vacancy rate
  • Sligo has the highest vacancy rate 18.9% and Meath has the lowest 10.1%
  • Edenderry town with the highest vacancy rate 28.8% , Greystones lowest 5.8%
Commercial Vacancy Increases
The surprising result in this issue of the GeoView is the growth in the number of commercial vacancies.  The national commercial figure rose by 0.2% to 13.3% and as the table below shows, 18 counties showed an increase in there vacancy rate. 

Table 1 Change in Commercial Vacancy by County
The trend in commercial vacancy had until now, as expected in a growing economy, been downward.  However, this seems to have reversed in this report.  Whether it’s a blip or a trend it is not clear yet, and it is probably too widespread to be down to just one thing such as on line shopping.  We will see what the next report shows and then have a better understanding whether a trend or anomaly has occurred.
East West Divide
A striking feature is the degree of difference of vacancy rate between Dublin, its hinterland and the West and North West.  However, before getting into the details let’s look at the overall picture by province.
Looking at the provinces we see that
  • In Connacht five of the six counties had an increase commercial vacancy. Only Galway had no change and its vacancy rate is relatively high at 16.2%;
  • In Ulster all three counties had a rise in commercial vacancy;
  • In Munster four of the six counties showed an increase in vacancy rate with two (Clare and Waterford) showing a decrease; and
  • In Leinster seven of the thirteen counties showed an increase with two showing no change and four showing an increase.
This analysis shows that Leinster, in particular Dublin and its hinterland, is doing well.  Taking a quick spin we see that Meath (10.1%), Wexford (10.9%) and Westmeath (10.9%) all have lower commercial vacancy rates than the national average of 13.3%. As for Dublin its commercial vacancy rate of 12.1% is static year-on-year albeit with large variations in between postal districts with Dublin 16 having a rate of 6.9% and Dublin 8 having 15.4%, showing a spread of 8.5% between the lowest and highest vacancy rates in Dublin.
As we move west as Table 2 below shows the figures becoming gloomier, with the highest commercial vacancy in the country occurring in Sligo and the remaining four counties all having commercial vacancy rates of 16%. Plus, all are well above the national average of 13.3% and clearly far exceeding the vacancy rates of Dublin and its hinterland as discussed above.

Table 2 Commercial Vacancy Rate in Connacht Counties
County Vacancy Rate
Sligo 18.9%
Leitrim 16.7%
Roscommon 16.3%
Mayo 16.3%
Galway 16.2%
One last area of note was the inclusion in the report of the feature on Accommodation and Food.   This comprises three sectors
  • Restaurants – from fine dining to take away (41% of the total)
  • Pubs – just pubs (33% of the total)
  • Accommodation – this would include Hotels, B&Bs and hostels (26% of the total).
The most striking feature was the reliance of Kerry, Clare and Donegal on this sector.  While Dublin (4,510) and Cork (2,448) had the highest total number it makes up 23.8%, 20.5% and 19.2% of these three counties commercial stock.  This is because these areas are clearly focused on tourism which is making them vulnerable to both world economic trends and Brexit, particularly with currency swings which will probably reduce UK tourist numbers.
In summary these are surprising results with an unexpected increase in national commercial vacancy rates.  Dublin and its hinterland have fared best and the West unfortunately has some of the highest vacancy rates.  Three counties Kerry, Clare and Donegal have a high concentration of their commerce in accommodation and food making them vulnerable to both Brexit and world economic trends.
Posted: 23/08/2019 16:14:43