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The following section provides a more detailed analysis of GVA growth in the Irish economy by labour and capital input, as well as by MFP. This section also provides breakdowns on the Foreign, the Domestic and Other and the Market Sector. Additional analysis of sectors is also presented.

X-axis labelLabour InputCapital ServicesMultifactor ProductivityGVA Growth
20002.147229210819953.608601674238012.403353977913118.15918486297107
20011.396149485986693.10879380264505-0.7174315871155723.78751170151617
20020.2866994239696363.724438670586962.082305128409156.09344322296574
20030.465586064361743.22419951480922-2.412267725931941.27751785323902
20041.424761412064993.321475819725730.407075802729025.15331303451974
20052.816365086379355.23558605595696-2.072616747753375.97933439458294
20062.333643690273523.06932124248923-0.8096295517753384.59333538098741
20071.937199209437912.678398288686163.238720413371977.85431791149604
2008-0.9747248137136631.94202982582496-3.36419462879041-2.39688961667911
2009-5.384996779608281.37922568931085-2.5196977463702-6.52546883666764
2010-4.86935892261911.054515813704095.678360275769031.86351716685402
2011-0.6603436966410440.6584461825601180.7371483476455760.735250833564649
2012-0.2373038319579671.32470225272772-2.91126867061019-1.82387024984044
20131.62641145281671.0746604872677-1.149224483481081.55184745660333
20141.682745432736513.6393891649882.022156273600697.3442908713252
20151.8349147093787136.5350720626426-12.509863245433525.8601235265878
20161.197833394673093.048444810310340.4242033436057474.67048154858918
20171.362755109582541.375278182962884.214463370382446.95249666292785
20181.26331595190601-0.9722515466438967.645720987522667.93678539278477

Source publication: National Income and Expenditure 2018 Tables 1-22 and Annex 1 for 1995-2018 (XLS 396KB)

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The above figure decomposes annual GVA growth into capital services, labour input and multi-factor productivity. GVA growth of 8% was recorded in 2018, following the increasing trend in GVA growth since 2016. This 8% GVA growth was attributed to decreased capital services and a doubling of the MFP result recorded in 2017. Labour growth has remained consistently steady at 1% since 2016. The strong GVA growth since 2016 can be explained by strong results in foreign dominated sectors such as Manufacturing, ICT and in the Domestic and Other sectors in areas such as Transport and Wholesale and Retail. Looking over the entire period, GVA growth recorded annual average growth of 5% over the eighteen years, driven by strong results in the early noughties and unprecedented growth in 2015. The pre-crash period was driven by increased capital services, while the years of the financial crash were associated with declining labour input and weak demand.

 

Domestic & Other GVA GrowthForeign GVA GrowthTotal GVA Growth
20004.563010784682623.684658037838148.15918486297107
20012.275680668952961.525060315036063.78751170151617
20021.845739011186624.547753787046386.09344322296574
20032.54078677628221-1.143403133553731.27751785323902
20044.480106884950280.6889990871630245.15331303451974
20053.867646586883532.138498019029245.97933439458294
20063.367758985850951.228432055159484.59333538098741
20075.62686841873022.249237151636977.85431791149604
2008-1.5737310161182-0.814503370869345-2.39688961667911
2009-6.832770989043580.522405367609193-6.52546883666764
20100.3658786274531821.553903625953471.86351716685402
20110.778408310554812-0.04055502942573940.735250833564649
2012-1.879991728053320.071722665881281-1.82387024984044
20131.89565880654332-0.3168265008757011.55184745660333
20144.432486823741732.966146372229787.3442908713252
20154.146983349869352225.8601235265878
20162.10972302327252.576050217634324.67048154858918
20172.833838730568654.187136097803486.95249666292785
20182.258872333874745.900503751545887.93678539278477

Source publication:  National Income and Expenditure 2018 Tables 1-22 and Annex 1 for 1995-2018 (XLS 396KB)

The chart above shows real GVA growth split into sectors dominated by Foreign-owned and Domestic and Other sectors. The sustained increase in GVA growth since 2016 has been driven by the continued increase in contributions from the foreign dominated sectors such as Manufacturing and ICT. In 2018 the 8% GVA growth was due to a 6% contribution from the foreign dominated sector and a 2% contribution from the Domestic and Other sector. The latter years of GVA growth are in stark contrast to the early 2000’s where, for example in 2007 the 8% GVA growth was explained by a contribution of 6% from the Domestic and Other sector but only a 2% contribution from the Foreign Dominated sectors.

*See Glossary of Terms or the Appendix for more information on the Foreign-owned Multinational Enterprise dominated sectors.

X-axis labelLabour InputCapital ServicesMultifactor ProductivityGVA Growth
20002.598757279307192.955810927302060.7523151848923096.30688339150156
20011.60764370590722.39971388112989-0.9135080175687243.09384956946837
20020.7040144505147862.95992780263213-1.036016811925462.62792544122146
20031.033042165289532.4513154600979-0.001478710176213573.48287891521122
20041.939213002649982.801884801312161.144441584925055.88553938888718
20053.538934620560674.66734520121259-3.145714292595115.06056552917815
20062.902173468117312.57437111845996-1.169945429534684.30659915704259
20072.5040311306062.336189274662092.246806318936097.08702672420418
2008-1.228215129113791.66254428606008-2.37938044127935-1.94505128433305
2009-6.864955037478020.995514740529902-2.92301849045344-8.79245878740156
2010-5.468389208835880.7807035009900895.180188208625580.49250250077979
2011-0.9810032536643020.5542591744264661.452110091186531.02536601194869
2012-0.3963087991765430.795396028322078-2.95392285315487-2.55483562400933
20131.881070569056990.905954732645805-0.26712233574552.5199029659573
20141.943317552416293.320025165055950.6983822201761555.96172493764839
20152.412312374217452.068966190449762.076023595870316.55730216053751
20161.656650907517781.24048624463970.7177538085672083.61489096072469
20171.94767070213981.011665405075461.812225351315754.77156145853102
20181.967572475035312.03236492731663-0.07896475883066613.92097264352127

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The figure above shows the Domestic and Other sector of the economy decomposed by factor inputs. The Domestic and Other sector recorded GVA growth of 4% in 2018, down from 5% in 2017. The 4% growth in 2018 can be explained by an increased contribution from capital services of 2% and steady growth in labour input of 2%. The increase in capital services was due to an increase in investment in Transport. The earlier years saw high rates of growth in the Domestic and Other sector from 2000 to 2007 and were due mainly to capital services with increases in labour input of between 0.5% and 3% also observed.

X-axis labelLabour InputCapital ServicesMultifactor ProductivityGVA Growth
200012.87109446836232.57244293526198-8.789458039345676.65407936427858
20014.8954492508431.7717383995708-3.478011736299733.18917591411407
20020.48602050866361.105058684983550.2553672016487881.84644639529594
20032.343148470692591.207114654881822.701428079438566.25169120501297
20048.318351046647930.8852038219375460.81785344490622510.0214083134917
200510.83234416922462.50720678526415-2.8649817788797810.474569175609
20068.689528554758683.19975833704869-7.21949025100754.66979664079987
20072.208727218838972.9866808216533-4.238971681902210.956436358590063
2008-12.2455359610396-0.156752259190336.65452622617759-5.74776199405235
2009-36.685888709870509.45246117944979-27.2334275304207
2010-35.562223104253609.4490146879565-26.1132084162971
2011-7.623562495427150-6.5172677015396-14.1408301969667
2012-7.9291767840537305.93607827282204-1.99309851123168
20133.32707721090711-0.3253727972018756.304265799442469.3059702131477
201413.4128431848729-0.940492418556242-5.643187902168476.82916286414823
201511.28269974052351.50365515406013-6.170044611871166.61631028271252
20167.849602000378872.353845820921580.55441606761927610.7578638889197
20176.421394715073622.713512207193264.2063275790381913.3412345013051
20188.900230921528494.88424823902174-2.8031943251191910.981284835431

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The chart above shows the factor inputs in the Construction sector. In 2018, GVA growth reduced from 13% in 2017 to 11% in 2018. This slight decline was explained by a fall in MFP from 4% in 2017 to -3% in 2018. However, the labour and capital input indicators grew on 2017, with labour growing from 6% to 9% and capital growing from 3% to 5%. The increased labour input was due to strong growth in hours worked, while the increased capital input was due to increased investment in Buildings and Structures. The Construction sector was one of the hardest hit sectors during the financial crisis with negative GVA growth recorded between 2008 and 2012. Since 2013, GVA growth recovered and has grown at levels not seen since pre-crisis.

X-axis labelLabour InputCapital ServicesMultifactor ProductivityGVA Growth
20003.120166091643148.4511306607008-8.680780328367962.89051642397598
20010.685900649519747.58596225014522-12.7900399953909-4.51817709572595
20020.2876902861885994.11111168198568-3.100966190824011.29783577735028
20030.2002141404140782.55086516125469-3.00607567233942-0.254996370670646
20041.985293687785341.12185646743431-0.7006512532090612.40649890201059
20053.173817249256362.83743954939909-0.5540444042832045.45721239437225
20061.982128298523544.659084098560010.3762680684082747.01748046549182
20073.124032823863264.873643264046584.9437396654563712.9414157533662
20080.3310612731979722.40988880828144-7.73649258821819-4.99554250673878
2009-7.50330632102928-2.44837838759916-2.96521230703992-12.9168970156684
20103.13047279148346-4.098299142736422.007974201081531.04014784982858
2011-0.00842935310102778-1.752746295411730.149434991109538-1.61174065740322
20120.44474358210963-1.02867108072252-0.788078816939276-1.37200631555217
20131.364293700848772.38770743515049-3.017820409146050.734180726853206
20141.091738841203021.181396227717174.674424728064226.9475597969844
20151.429489727830255.926923211544741.421542716346478.77795565572146
20160.4445017885575152.089275274390612.436884051578544.97066111452666
20171.481205398009844.60619122270763-7.0446531165336-0.957256495816128
2018-0.04407894571746192.087029626652654.185496024498096.22844670543328

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For the Wholesale and Retail sector, GVA growth rebounded from -1% in 2017 to 6% in 2018. The strong GVA growth was attributed to the strong growth in retail sales, particularly in motor vehicles growing at 6.2%. The capital contribution declined from 5% in 2017 to 2% in 2018, while the labour input declined from 1% in 2017 to no growth in 2018, with no growth being recorded in hours worked. In this sector the impact of the crisis was felt most with GVA growth falling by 5% in 2008 and by 13% in 2009. These large declines in GVA were due to falling demand for retail services but also back up the supply chain to falling Wholesale demand.

X-axis labelLabour InputCapital ServicesMulti-factor ProductivityGVA Growth
20003.139120716985794.29517959212137-7.91374259363246-0.479442284525311
2001-0.03799596941376273.667292299317270.1170514202534543.74634775015696
20020.6721503681116022.15225588569503-3.19983927527319-0.375433021466554
20034.136704309802820.05635813902000312.895856020978117.08891846980093
2004-3.75992890943944-0.7493546373356132.93054213363083-1.57874141314422
20054.784451015554120.64785499630771-2.676785084161442.75552092770039
20064.463925787012860.846540333394587-1.07354828515614.23691783525135
20077.39055867675290.8158884171405890.2837782568888588.49022535078234
2008-5.393728160629340.6282919658418365.190767074761130.425330879973629
2009-3.30950094603483-0.645329742122641-4.92385180521638-8.87868249337385
2010-3.27494750098698-0.369025590538223-0.235884859676414-3.87985795120162
2011-5.53209240414543-0.1137353856632566.471311308971320.825483519162629
20122.02159365000268-0.493817736422481-2.8733209535234-1.3455450399432
20139.310686262874510.00434896486296717-0.7492044892065588.56583073853092
20147.023707561127830.177143623237021-0.9100171233013936.29083406106345
20151.912328574400710.5931192160144312.855137226123115.36058501653824
20164.878173446084210.3537753346607280.7562837928275465.98823257357248
20174.382286816429650.1320575457765710.7241404397068715.23848480191309
20186.778352927123750.9385321047667291.151287109947828.8681721418383

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The Accommodation and Food sector is a classic example of a domestic dominated sector. In 2018, growth was recorded in the sector, with GVA increasing from 5% in 2017 to 9% in 2018. This could be associated with increased tourism in Ireland with trips to Ireland increasing by 6.9% in 2018. The strong GVA growth can be put down to increased contributions from labour, where hours worked grew by 8% in 2018. A small increase in the capital services was recorded in 2018 with growth of 1%, the first since 2015. This was due to increases in capital stock associated with Building and Structures growing by 9%. Like the Wholesale and Retail sector, this sector also suffered badly during the crisis, with large falls in labour input occurring during the years 2008-2011. Since then, the sector has recovered and has recorded increases in labour input that match pre-crisis levels.

X-axis labelLabour InputCapital ServicesMultifactor ProductivityGVA Growth
20001.944634982882874.391309285603642.670980114714669.00692438320116
20011.074176068241313.36226128013053-0.4766618397307773.95977550864106
2002-0.2916391082889614.283186911085042.561537085207056.55308488800312
20030.009437903766990943.53829209609609-3.443038941710030.10469105815305
20041.534702344094683.485294564830930.7257268347845065.74572374371012
20052.452026092127617.5261543061755-3.492564709042336.48561568926078
20062.038540257777252.80341979668263-0.8516696261230683.99029042833681
20071.825006544781862.489824438760514.782772164350959.09760314789332
2008-1.533736273922561.24181179025608-2.35814329126441-2.65006777493089
2009-6.690218006977252.62764955419251-3.67831690712597-7.74088535991071
2010-5.292895885595212.175244127504845.842616808557262.72496505046689
2011-0.3384672420119891.42358421387899-0.642730025236190.442386946630813
2012-0.4228246816231153.14817947177431-5.24883275396399-2.52347796381279
20131.909275739962262.21181302106121-2.556667204726131.56442155629735
20141.610545122736277.083264265417850.3608927975545099.05470218570863
20151.7019620948256458.9754298210521-27.692498977834432.9848929380434
20161.319757338527834.25793092525492-0.2388699070913645.33881835669139
20171.104689677351351.660656671576135.054434364497197.81978071342466
20181.06845940710675-0.3627359193495418.488794931597139.19451841935435

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The figure above shows GVA in the Market sector broken down by factor inputs over the period 2000 to 2018. The Market sector is an aggregate sector which encompasses all market activity in the economy. The sector includes all NACE sectors excluding Real Estate, Public Administration, Education and Human Health (see glossary for more details). The most recent year, 2018 saw continued growth in GVA in the Market sector reaching 9%. This growth was associated with the strong economic performance across practically all sectors but was also associated with a corresponding increase in MFP. Like the overall economy, labour input in the market sector remained steady at 1%. In general, GVA growth had remained under 10% in the early noughties before turning negative in 2008 and for the following few years due to the financial crisis.

X-axis labelLabour InputCapital ServicesMultifactor ProductivityGVA Growth
20000.8436175063974485.824606143814036.6576973438653713.3259209940769
20010.8262852833960685.64436271592886-0.7037370398454075.76691095947952
2002-0.8766029128620326.1246812368828610.031089683097615.2791680071184
2003-1.186319483915257.00995998533148-10.0507585304106-4.22711802899438
2004-0.281707000916894.66950733844281-1.50247410873442.88532622879152
20050.2394524253897116.374015193938462.458405561341259.07187318066942
20060.07668647239890014.945510835862520.612802786077355.63500009433877
2007-0.5053371394216373.167429750975068.254808482639710.9169010941931
20080.1293805581395971.3023713423677-5.69828665019766-4.26653474969036
20090.1691584619875352.89354121575776-0.7188428303077322.34385684743756
2010-3.116415474791032.066699308573467.093611378448846.04389521223128
20110.4372563211262461.14463502512978-1.7502754401799-0.168384093923879
20120.2987653929457746.14000440396544-6.16724089527860.271528901632623
20130.8835707174738622.02701372561713-4.1895263878583-1.27894194476731
20140.9282454559570724.948038536219085.6872185358002511.5635025279764
20150.724548526424644147.257211888055-65.133166228351982.8485941861279
20160.5668151971662376.43312283557796-0.8131595249174356.18677850782676
20170.4904544824797031.968085643197487.8521080065828810.3106481322601
20180.180880949095554-7.5722628836999521.310947233118913.9195652985145

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The chart above shows the sources of GVA growth in the Foreign dominated sector with the years 2015 to 2018 included. GVA growth of 14% occurred in 2018, a 4% increase on 2017. This 14% growth was associated with a large fall in capital services, falling from 2% in 2017 to -8% in 2018. This fall in capital services occurred while at the same time MFP increased to 21% to balance the impact. The 2015 growth rate is mostly due to significant corporate relocations of entire balance sheets dominated by intellectual property products by Foreign owned multinationals. Significant exports involving contract manufacturing abroad drove the very strong GVA results for 2015.

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The chart above shows the relationship between the ratio of aggregate intangible and tangible fixed assets and MFP growth in 2018. The chart highlights the importance of intangibles in production processes. Three results that stand out are for the sectors of Manufacturing, Information and Communications as well as Mining and Quarrying. In Manufacturing Intangibles assets were over six times the level of tangible assets in 2018 and help explain the MFP growth of 16% in the sector, while for ICT the Intangibles assets ratio is nearly four times which to some extent explain the 19% growth in MFP for this sector. Given these sectors are highly globalised and their balance sheets are dominated largely by intangible assets, too much emphasis should not be placed on the high readings. The Mining and Quarrying series reflects the ongoing volatility in the sector and is regarded as an outlier in this case. Most of the domestic dominated sectors are clustered together and give more modest results, for example, a ratio of 1 is associated with a 3% fall in MFP growth in Construction, while a ratio of 0 is associated with the 1% MFP growth in Accommodation and Food.  In summary, the chart shows a positive correlation between MFP growth and the ratio of Intangibles/Tangibles.

*A reference table for the chart is attached below.

Show Table: 6.9:Reference Table

X-axis labelLabour InputCapital ServicesMultifactor ProductivityGVA Growth
20000.4473267664787327.100164381817766.8428215310073914.3903126793039
2001-0.1077582011614258.22889585540048-2.885722261773025.23541539246604
2002-1.269094086277559.090408492632563.849254902012711.6705693083677
2003-0.5917984539399541.96864850434131-2.18479123177607-0.807941181374716
2004-0.66160242828004-1.567668534233081.60692965657329-0.622341305939833
2005-0.4296419147243125.837950074474860.3148709391311195.72317909888167
2006-0.3753506210924334.56327997248389-2.064648239002522.12328111238893
20070.1408697930449253.77699012865141.969451850022315.88731177171864
2008-1.522388093557181.09046883540015-9.15007572192785-9.58199498008488
2009-2.638253009114050.262448635586562-2.68580481985473-5.06160919338222
2010-4.57874181619881-3.8215217550720212.84489775715914.44463418588825
2011-0.142443416288479-3.671049384640427.506555743925093.69306294299618
2012-0.190316084455611-0.172459304489603-0.847231847249807-1.21000723619502
20131.232908833879025.15785104529431-10.5534256553742-4.1626657762009
20141.000379273973533.880358274025565.7145398534756310.5952774014747
20151.10912149437612159.96422455216-69.246170392813291.8271756537226
20160.5651048687292155.96985931069319-2.784138527952783.75082565146962
20170.0472128005829982-5.1083382871836712.34376221017597.28263672357528
2018-0.00824754197690709-6.3153619209699115.93769769959619.61408823664931

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The chart above highlights the foreign dominated sector of Manufacturing. Due to the large globalisation events of 2015, much of the detail over the entire period is difficult to interpret. As a result, the full data is best viewed on Statbank. In 2018 GVA growth increased by 10%, following an increasing trend since 2016. The 10% GVA growth in 2018 was explained by a slight fall in capital services, while MFP increased to 16%. As MFP growth is an indicator calculated as a residual, it can be difficult to explain the precise reason for changes to it, it might be due to increased efficiency in the use of inputs or new technology.

X-axis labelLabour InputCapital ServicesMultifactor ProductivityGVA Growth
20000.66820991645361910.8636060507416-10.65640948916770.875406478027507
20011.214463488039899.63787825230008-6.954525615683613.89781612465636
20020.8893213718278176.460402341741963.6535574952726511.0032812088424
2003-3.001852714730113.25922118840215-10.7114538563616-10.4540853826896
2004-1.161995414902213.5115903902932916.269822976521718.6194179519128
20052.561576768350264.551775692536883.2996987232981410.4130511841853
20061.13706843917516.097067637962246.4555607610199713.6896968381573
2007-0.1391776041996465.8484048120746312.415952201998818.1251794098738
20081.219206094426855.514866848097963.5068830820063310.2409560245311
2009-0.03447277829296553.811709736654870.6675626973205514.44479965568245
2010-5.176192003095834.045388752202369.448015117634078.31721186674059
20111.271459985627424.28989345989791-4.4539962528091.10735719271633
20120.6331639053167089.53988982839432-7.672889362907512.50016437080351
20131.685713697756787.670394808196091.1289171776497410.4850256836026
2014-0.01212017931271269.126080560445421.5334389258302410.6473993069629
20150.62089540065062714.0679101522951-0.13799855775151214.5508069951942
20161.5418416742645214.645638929242-4.1707374332054412.0167431703011
20172.2685385739930349.6465025807652-34.871486272379317.0435548823789
20180.1849728930441361.654747421838719.397058870297621.2367791851805

Get the data: Statbank PIA04 

The above chart shows the breakdown of GVA in the Information and Communications sector by factor inputs. Due to revisions of intangible assets for 2017, a large spike occurred in that year with an increase in capital input of 50% and a corresponding decrease in MFP. In 2018, GVA growth of 21% was recorded in the sector, the highest since pre-crisis periods. This was attributed to a small but modest increase in capital input of 2%, while the remainder of the GVA growth was explained by growth in MFP of 19%. Greater use of the digital platforms for many entities in this sector together with profitable FDI additions go some way towards explaining this strong MFP result. The only negative growth took place in 2003, with the onset of the dot-com bust, where a significant fall in MFP and labour occurred.

X-axis labelAnnual Average 2000 to 2018
Greece0.215036320426315
Italy0.462548098179461
Portugal0.824768576858968
Denmark1.31893237906162
Euro area (19 countries)1.41090357089447
France1.41148639344239
Germany1.46373330747163
Finland1.5231687218776
European Union - 27 countries 1.56556727499844
Netherlands1.61089432271925
Austria1.70347137996473
Belgium1.71166780974561
Croatia1.79121322424787
Spain1.79539747646423
United Kingdom1.91119776120725
Cyprus2.36883015986003
Sweden2.37681754409918
Slovenia2.50573899755616
Hungary2.51133971482761
Ireland Domestic & Other2.80235138898714
Czechia2.89290971966166
Luxembourg2.93183154170966
Bulgaria3.56015696882535
Latvia3.63050449237702
Poland3.69946016188055
Slovakia3.78389428017866
Estonia3.82394949516099
Romania3.85031260296377
Lithuania3.94498309269288
Ireland4.70761395414365
Ireland Foreign9.81458410777688

Get the data: Eurostat

The above figure highlights Ireland’s position in real GVA growth terms relative to its European counterparts. Looking at the Foreign dominated sector in the Irish economy, average growth in real GVA stood at 9.8% over the period 2000-2018. This sizeable growth in real GVA places Ireland at the top of the distribution. This is due to the large influx of activities relating to IP intensive manufacturing including contract manufacturing and aircraft leasing. Real GVA growth for Ireland is also at a relatively high position in the distribution falling just behind the Foreign sector, with an annual average growth rate of 4.7%. The impact of the Foreign sector goes a long way towards explaining this result for the overall economy. The Irish Domestic and Other sector also performs relatively well recording an annual average growth rate of 2.8%. This result places the Domestic and Other sector 12th in the distribution just behind Eastern and Central European countries such as Bulgaria, Poland, Latvia and Estonia, among others. 

X-axis labelAnnual Average growth 2000 to 2018
Ireland Foreign -1.416170652058953
Italy-0.229985580397414
Ireland0.0258414936554821
Ireland Domestic & Other0.06483842138715
Belgium0.12219797415753
France0.409391904603009
Denmark0.441309538546496
Austria0.477188723009267
UK0.582561541832728
Germany0.648179031116643
Finland0.811962299946348

Get the data: OECD

The above chart shows Ireland’s MFP position relative to its European partners over the period 2000 to 2018. The Irish economy had a relatively poor performance when compared to its European counterparts, showing annual average growth of zero percent over the entire eighteen-year period behind countries such as Ireland-Domestic and Other, Finland, Germany, the UK and Austria, among others. The Foreign sector in the Irish economy also shows a poor performance relative to the other EU countries shown. The Foreign sector posted annual average decline of 1% in the period up to 2018, resulting in a position at the bottom of the distribution. The negative results in the Foreign sector as well as in the Irish economy are explained by the impact that sudden large additions to capital, particularly intangible capital have on GVA results.  In these cases, the results of productivity calculations can be that strong positive capital services are reported along with negative MFP results.

The Domestic and Other sector of the economy recorded an annual average growth rate of 0.1% in the period to 2018, resulting in a position at the bottom of the distribution, just above Italy. Austria, Germany and France recorded positive MFP annual average growth rates in the period to 2018.

X-axis labelPercentage Change
Belgium-0.480267570612853
Finland-0.429310920287514
Italy-0.138325989729658
Ireland Domestic-0.0789647588306609
Germany0.104035418161528
UK0.213076804966911
Austria0.395944707633464
France0.764347280446189
Denmark1.92567042978348
Ireland7.64570675250381
Ireland Foreign21.3109472331189

Get the data: OECD

The chart above shows the percentage change in MFP growth in 2018. The Foreign sector in the Irish economy recorded the largest growth in MFP on 2018, with a result of 21%. This was due to the fall in capital services and the strong growth in GVA, while labour remained unchanged. The picture for the Irish economy follows a similar one to the Foreign sector, with growth of 8% recorded. This result is impacted by the globalisation activities of the Foreign sector and places Ireland at the top end of the distribution among the countries examined. This result also highlights the correlation between MFP and intangibles presented earlier. The Domestic and Other sector recorded growth of -0.07% and places Ireland at the bottom of the distribution, just above Italy, Finland and Belgium.

X-axis labelAverage Labour InputAverage Capital InputAverage Multi-factor ProductivityAverage GVA Growth
Electricity, Gas and Steam1.654005122192554.97475411736489-7.28473034507986-0.655971105522424
Real Estate-0.2857268602260711.89045741026265-1.212749415804780.3919811342318
Financial and Insurance Activities0.2676459628058618.08693570490308-6.029415120593172.32516654711576
Transport and Storage3.103173295573653.24576444963182-0.1652465087425756.1836912364629
Wholesale and Retail-0.04407894571746192.087029626652654.185496024498096.22844670543328
Professional Scientific,
Admin and Support Services
2.967370281489817.01017285016317-3.712880285288366.26466284636462
Manufacturing-0.00824754197690709-6.3153619209699115.93769769959619.61408823664931
Construction8.900230921528494.88424823902174-2.8031943251191910.981284835431
Information and Communications0.1849728930441361.654747421838719.397058870297621.2367791851805

Get the data: Statbank PIA04 

There has been considerable variation in GVA growth by sector in 2018. Among the sectors examined, Information and Communications as well as Manufacturing, had some of the largest growth in GVA. Much of this GVA growth can be explained by positive MFP contributions and smaller contributions from capital, which highlights the correlation between MFP and intangibles discussed in the previous chart. Within the Domestic and Other sectors examined, Construction and Wholesale and Retail had some of the largest increases in GVA growth in 2018. Large increases in labour input occurred in the Construction sector with growth of 9%, while growth in capital services of 2% in the Wholesale and Retail sector helped to provide further insight into the contributors to positive GVA growth.

X-axis labelPercentage Contribution
Financial and Insurance Activities-0.426472699584677
Professional Scientific, Admin and Support Services-0.391015947915133
Agriculture Forestry Fishing-0.163370439986949
Human Health and Social Work-0.114807094134995
Education-0.0906519588951701
Construction-0.0780852546255879
Electricity, Gas and Steam-0.0682589894133294
Real Estate-0.0680002003924914
Public Admin and Defence-0.0197459494288829
Water Supply Sewerage Waste Management-0.00531868718534661
Transport and Storage-0.00403289736645046
Arts Entertainment and recreation0.00996930834004389
Accommodation and Food Service Activities0.021546084390931
Mining and Quarrying0.273943008279807
Wholesale and Retail0.333700328790394
Information and Communications2.47993150309568
Manufacturing5.49138013527416
Total7.65

Get the data: Statbank PIA04

The chart above shows the contributions to MFP growth for 2018. Manufacturing and ICT made the largest contribution to growth in 2018, however these sectors are dominated by MNE activity. Wholesale and Retail and Mining and Quarrying are domestic dominated sectors and also made positive contributions to MFP growth. This was due to the strong GVA growth recorded in these two sectors in 2018, linked to strong retail sales and higher levels of activity. The main negative contributors were Financial and Insurance activities as well as Professional and Scientific services. The negative contribution from Financial services was due to GVA growth of 2%, associated with this growth was an 8% increase in capital services and consequently negative MFP growth is observed. A similar story was evident in the Professional Services sector where GVA growth of 6% was recorded. Increased capital investment and labour growth occurred in 2018 in comparison to 2017, leading to a decline in MFP growth.

X-axis labelContribution to MFPContribution to Labour Productivity
Agriculture Forestry Fishing-0.163370439986949-0.140574932266182
Mining and Quarrying0.2739430082798070.32652908865032
Manufacturing5.491380135274163.33911134940663
Electricity, Gas and Steam-0.0682589894133294-0.0554648615264431
Water Supply Sewerage Waste Management-0.005318687185346610.0173896933368657
Construction-0.0780852546255879-0.0652350255700195
Wholesale and Retail0.3337003287903940.503158272417643
Transport and Storage-0.004032897366450460.0180635253508373
Accommodation and Food Service Activities0.0215460843909310.00822450029446087
Information and Communications2.479931503095682.58642524724161
Financial and Insurance Activities-0.4264726995846770.115674062727406
Real Estate-0.06800020039249140.414924610724276
Professional Scientific, Admin and Support Services-0.391015947915133-0.0876940769898272
Public Admin and Defence-0.0197459494288829-0.0257575580211549
Education-0.0906519588951701-0.0889049856870112
Human Health and Social Work-0.114807094134995-0.0829759861593901
Arts Entertainment and recreation0.009969308340043890.0183653579515728
Other Service activities 0.01305584774470110.0133399700113895
Total7.654.24505259566785

Get the data: Statbank PIA04 

The chart above shows the contribution of both Labour productivity and MFP to individual sectors in the economy. The biggest contributors to both Labour productivity and MFP came from the foreign dominated sectors of Manufacturing and ICT. The biggest contributor from the domestic dominated sectors came from Wholesale and Retail. For Financial and Insurance, the sector contributed negatively to MFP growth, however contributed positively to Labour productivity growth. The MFP result was due to GVA growth of 2%, a slight increase in labour on 2017 but a slight fall in capital which led to a decline in MFP. The positive contribution to labour productivity was due to both GVA and hours increasing steadily in 2018.

 


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