Traffic a threat to Galway’s long-term positive economic outlook

A leading Irish business and tax consultant has said that while the long-term economic prospects for Galway City are very positive, traffic, housing and lack of office space are posing a serious threat to growth.

Frank Walsh, Lead Partner with Grant Thornton, told the Connacht Tribune that there is “no place better than Galway” from an employee’s perspective.

Giving an overview of existing economic conditions and an outlook for the city and county, Mr Walsh said lending restrictions and lack of competition between banks are also stunting growth.

He also warned that towns and villages are probably already feeling the effects of the ‘Brexit’ vote.

“The outlook for Galway is very positive, but there are a few issues that will stop it in its own tracks unless they’re dealt with and that’s the planning, the traffic and availability of offices.

“Traffic is one of the biggest problems, and I think it’s choking the city. Just last week, I heard the story of a businessman coming out of one of the industrial estates in Galway heading to catch a plane.

“Because he was delayed for 30 minutes coming out of the estate, he missed his flight. How do you think he feels, and what impression do you think that will have left of Galway?

“There is a shortage of office space – not out in the industrial estates, but modern employers in the city centre who go where their customers are situated and where they can get employees. Young employees want to be where the action is,” said Mr Walsh, one of whose areas of expertise is tax advice on Foreign Direct Investment.

“If you could solve [those problems], there’s no place better to work than Galway City. Galway has loads to offer, it’s a fun place to be, it’s a young city which is very important and that’s because of the universities – it’s got students during the cold season and tourists in the warm season,” he said.

Mr Walsh said he believes the property market plays less of a role in Galway’s economy than a decade ago, but the shortage of supply for sale and rent is a huge obstacle to growth.

“We went off on a mad property party in 2005/6/7/8 and then someone took away the champagne in 2009 and we all came away with a major hangover, no money and very little property value in our pockets.

“The property market is not really an issue now – bar the shortage of supply – because banks are not giving out as much money, you have to have more equity yourself and they’re not competing with each other as much as they were.

“There’s a problem on the supply side; the banks are not giving money to developers and the planning process moves very slowly. Maybe we need to look at taking away controls from local authorities on giving planning permission and maybe centralising it.

“They need to do something to speed up the planning process – if a project is being held up at that point, it’ll be a long time before more supply comes on the market. In Galway City, you can’t get a house . . . you can’t rent, you can’t buy,” he said.

Mr Walsh said many rural towns and villages in Galway are continuing to struggle: “The boom bypassed them, but the recession hit them.”

“If you go out to Connemara, you’ll find very little happening out there. There’s probably a spin-off in terms of tourism uplift, and there’s no doubt the Wild Atlantic Way has been very helpful for tourism, but not everybody is involved in tourism out there.

“There’d be a lot of labourers, farmers – small farmers – and I’m sure they’re suffering. They will suffer more because of Brexit.”

He said that because sterling had dropped in value, the cost of trade with the UK had increased.

“If you’re a farmer selling your produce to Kepak, they have to sell into the UK and they’re going to get less in euro terms. Then the farmers will suffer.

“You have the fall in sterling, the uncertainty and whether we have a Free Trade Agreement within that area – at the moment, that’s having a bad effect.

“Our biggest tourist source is the UK. If you’re getting paid stg£100, it’s not going to go as far in Ireland as it did before, or any place else in Europe. They might still be coming, but they’ll have less to spend, and I think that will have an effect.

“Business hates uncertainty; banks won’t lend, they’ll hold back on making decisions, people will hold back on a decision to buy a house or expand their business because they don’t know what the future will look like,” said Mr Walsh.

He expects the rural population to continue to migrate towards the city, which will also have an effect on villages.

“There’s always a drift to the city, that’s what we’ve seen in history in every place else in the world. I can’t see Galway county being any different and that’s going to have its own effect. There’ll be less people to spend money in shops in villages and smaller towns, but more people in the bigger towns,” said Mr Walsh.

He said his company is now extremely busy with business and tax advice, and staff levels in Galway have increased from ten people in 2012 to 40 at the moment, and a further ten jobs will be created over the coming year.

“Our own view on the city is very, very positive. We’re getting a lot of local work and we’re growing, and our experience has been very good so far.

“Our main work is auditing and accounting, business advisory and tax consultancy. We’ve done very well in receiverships and liquidations, we don’t see that as a long-term prospect at all.

“We see a lot of growth in business advisory . . . we have more people in Galway employed in tax advice and auditing than we have doing receiverships and liquidations.

“We see growth in business coming into Galway and existing businesses expanding, and setting up new ventures. We’re very happy to invest and have taken a long-term very positive view of Galway,” said Mr Walsh.