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Developments in Capital Stocks and Services

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Capital services play a major part in explaining Irish economic growth and consequently, the growth in labour productivity over the period. This chapter describes the growth in Ireland’s capital stocks over the period 2000 to 2016 and also explains capital services, the most appropriate measure of capital input.

X-axis labelCapital Intensity (Stocks & Employment)
2000150.183747381841
2001155.336468432644
2002164.11726755386
2003171.418219074743
2004177.428561296846
2005186.502463484327
2006190.319341464294
2007193.661766742921
2008203.4757007402
2009227.745995553215
2010241.957903052731
2011246.577143358051
2012253.509607671926
2013252.16220686508
2014262.264018954909
2015376.095803102368
2016378.65859007453

Source publication: Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank CSA02, StatBank PIA01

There have been substantial increases in the quantity of capital in use in the economy since 2000. One way of understanding these increases is in terms of capital stocks per employee. Ireland’s capital stock per employee has increased from 150 thousand euro per employee to 378 thousand per employee between 2000 and 2016, an increase of 152 percent.

X-axis label20002016
Luxembourg319364.983087789399751.2012702
Ireland150183.747381841378658.59007453
Austria259056.977288353300927.79107035
Denmark285939.393414166283316.549576842
Germany212313.243858765218736.140184134
United Kingdom181430.714849707157092.525997226

Source publication: Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank CSA02, StatBank PIA01, Eurostat (capital stocks), Eurostat (employment)

Ireland had a level of capital stocks per employee below many of its EU peers in 2000. However by 2016 as a result of significant capital deepening, capital intensity of labour had grown at a much faster rate than many other European countries and the value of capital stocks per employee is now one of the highest in Europe.

X-axis labelCumulative Growth 2000 to 2014
Latvia-13.3873
United Kingdom-8.05272
Hungary-0.86625
Denmark0.699769
Slovenia2.641143
France6.49663
Germany11.67973
Portugal16.92172
Italy18.88476
Netherlands20.22825
Belgium20.85034
Finland22.53051
Sweden24.87886
Austria25.62501
Greece26.49629
Norway35.64066
Cyprus44.35567
Poland53.18162
Lithuania56.35145
Czech Republic67.12422
Luxembourg72.08685
Ireland - Domestic & Other96.7125175
Ireland99.8174767
Estonia124.8231
Ireland - Foreign130.5095172

Source publication: Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank CSA02, Eurostat

The charts above and below compares Ireland’s cumulative growth in capital stocks to other EU countries. From 2000 to 2014, the rate of increase in capital stocks in Ireland for both the Foreign sector and the Domestic and Other sector was higher than for any other country in the EU for which data are available.

X-axis labelCumulative Growth 2000 to 2016
United Kingdom-6.53478
Slovenia1.260262
Denmark2.503239
France9.045771
Germany13.36167
Italy18.42545
Netherlands22.98877
Belgium24.29587
Finland24.30258
Austria28.71805
Czech Republic74.28265
Luxembourg78.7099
Ireland - Domestic & Other109.0690875
Ireland204.1151412
Ireland - Foreign1238.4004827

Get the data: StatBank CSA02, Eurostat

The dramatic growth in Ireland’s capital stock in 2015, associated with the level shift in GVA in the same year, puts overall capital stock growth significantly ahead of all other EU countries over the period 2000 to 2016, for which data are available.

X-axis labelFlow of Capital ServicesCapital Stocks Growth
20007.9142253657.0537272
20016.9578846946.6498194
20027.9115082277.3143716
20036.53284566.3878348
20047.2246796757.0178645
200511.3775796110.2773057
20066.8349038266.7632779
20076.1968222446.20403
20084.5143085534.40621
20092.6546853123.15183
20101.7447255861.932
20111.5840856921.35241
20122.9327833112.2114
20132.3377979341.96686
20147.2073310535.75766

Get the data: StatBank CSA02, StatBank PIA01

Capital services measure the productive use of capital. The volume index of capital services estimates the flow of capital services derived from all the capital assets in the economy. The main difference between the flow of capital services and the growth of capital stocks is the way in which different types and ages of assets are aggregated together. Capital services tend to grow at a faster rate than capital stocks. This can be understood from the intuition that a capital asset’s value will decline more quickly than its overall usefulness. Capital services are composed of the value of capital stocks weighted by the user cost for each asset. The user cost for each asset is based on the allocation of capital compensation in each asset’s sector. More information on calculating capital services can be found in the appendix.

X-axis labelFlow of Capital ServicesCapital Stocks Growth
20007.9142253657.0537272
20016.9578846946.6498194
20027.9115082277.3143716
20036.53284566.3878348
20047.2246796757.0178645
200511.3775796110.2773057
20066.8349038266.7632779
20076.1968222446.20403
20084.5143085534.40621
20092.6546853123.15183
20101.7447255861.932
20111.5840856921.35241
20122.9327833112.2114
20132.3377979341.96686
20147.2073310535.75766
201581.9419103147.0255208
20163.8251034593.51704

Source publication: Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank CSA02, StatBank PIA01

The above chart includes growth in capital stocks in 2015 and 2016. The flow of capital services in 2015 was much greater than the growth in capital stocks.

Cultivated AssetsDwellingsIntangiblesOther Buildings & StructuresOther Machinery & EquipmentTransport & EquipmentTotal
2000-0.0133082.23450.2716331.662231.518151.943457.6166516
20010.00076232.336520.897641.632380.7198051.139386.726497
2002-0.00561152.160271.025761.751830.4587552.223137.6141337
20030.00042.176230.6900171.707720.822230.931726.3283161
2004-0.0011792.556540.6553171.735190.5907941.438966.9756257
2005-0.0402763.521180.6983261.36750.5475794.6812810.7755861
20060.00306483.50130.5807671.344860.3472320.834236.6114502
2007-0.0015893.353460.3305851.390710.344550.5946826.0124
2008-0.00006983.214140.07601261.098170.116417-0.0892814.41538
20090.00131211.50640.1734720.80209-0.0184130.1552092.62006
2010-0.00525730.3569020.4070090.392843-0.0795860.6577671.72968
20110.00077570.1214350.4688680.1926560.2522650.5356721.57167
20120.00537-0.0610191.24860.3228680.05363661.321152.8906
2013-0.0060021-0.0328660.4370860.4822320.5757680.854682.31089
2014-0.00091890.07396241.059570.4954650.5495764.781796.9594447

Get the data: StatBank PIA01

Here we see that capital services grew at six percent or more during the years 2000 to 2007. These large increases were mainly driven by increases in the capital stock of dwellings and other buildings, during the boom period. Capital services growth was positive but lower from 2008 to 2013. Capital services growth returned to a similar growth rate in 2014 as during the 2000 to 2007 period. Nevertheless, there have been significant increases across almost all assets categories over the entire period, for example, there are additions to transport equipment in every year reflecting the increased aircraft leasing activities in Ireland.

Cultivated AssetsDwellingsIntangiblesOther Buildings & StructuresOther Machinery & EquipmentTransport & EquipmentConfidentialTotal
2000-0.0133082.23450.2716331.662231.518151.943457.6166516
20010.00076232.336520.897641.632380.7198051.139386.726497
2002-0.00561152.160271.025761.751830.4587552.223137.6141337
20030.00042.176230.6900171.707720.822230.931726.3283161
2004-0.0011792.556540.6553171.735190.5907941.438966.9756257
2005-0.0402763.521180.6983261.36750.5475794.6812810.7755861
20060.00306483.50130.5807671.344860.3472320.834236.6114502
2007-0.0015893.353460.3305851.390710.344550.5946826.0124
2008-0.00006983.214140.07601261.098170.116417-0.0892814.41538
20090.00131211.50640.1734720.80209-0.0184130.1552092.62006
2010-0.00525730.3569020.4070090.392843-0.0795860.6577671.72968
20110.00077570.1214350.4688680.1926560.2522650.5356721.57167
20120.00537-0.0610191.24860.3228680.05363661.321152.8906
2013-0.0060021-0.0328660.4370860.4822320.5757680.854682.31089
2014-0.00091890.07396241.059570.4954650.5495764.781796.9594447
20150.01052950.08667350.4572220.50338558.793917659.8517276
20160.00381710.1287710.497590.4874652.63611693.75376

Source publication: Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank PIA01

Capital services growth since 2000 is dominated by the extraordinary increase in capital in 2015 associated with international corporate relocations and greatly increased contract manufacturing activities.

Go to the next chapter: Summary