Press Statement

Preasráiteas

28 June 2022

Go to release: Productivity in Ireland 2020

The Central Statistics Office (CSO) has today (28 June 2022) released Productivity in Ireland 2020.

Commenting on the publication, Michael Connolly, Senior Statistician said: “This analysis of productivity covers the period when COVID-19 had impacted every aspect of the Irish economy. This analysis presents valuable and contrasting sector-by-sector information on how different economic undertakings experienced the pandemic and how their performance was correspondingly impacted.

Surprisingly despite the widespread impact of COVID-19 on the country in 2020, overall labour productivity increased by 14.1%. There were very different outcomes for key sectors across the economy; ICT and Pharma in the Foreign sector (+18.2%) produced more output than ever before, adding hugely to productivity measures. Tellingly, Labour Productivity was down by 56% in Transport and by 9% in Accommodation & Food, two of the sectors most impacted by COVID-19.

In fact, for many domestic-facing sectors, they were either closed-down or were operating in line with the tight government restrictions resulting in mixed productivity outcomes. For some sectors such as Construction, this resulted in employment declining faster than output, leading to positive productivity results which need to be carefully interpreted. For other sectors, the fall in Gross Value Added (GVA) exceeded the labour reductions with negative productivity recorded. In addition, the impact of the government employment wage subsidy scheme (EWSS) had a significant influence on these results.”

Looking at the importance of capital, Michael Connolly, Senior Statistician, further commented: “The detailed productivity analysis in this publication allows the policymaker or analyst to look beyond the aggregate results thanks to the Foreign sector analysis which largely explains the strong growth that occurred in the economy in 2020. The impact of capital in explaining the results presented here cannot be understated. Ireland has the lowest Labour Share in the EU and OECD meaning that it is the most capital intensive also. While the capital assets of Ireland cover a wide range of investments, it is really the developments in Intellectual Property Products (IPP) that have driven these results since 2015. The IPP assets consist of valuable patents and other intellectual property which underlie the enormous profits earned in the Foreign sector. Our guidance for analysts interested in interpreting the results presented in this report is that the Domestic & Other sector results provide a more meaningful measure for overall productivity trends in the underlying economy as they exclude these globalisation effects, in contrast to results for the Foreign-dominated Sector and Ireland-Total."

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