Productivity in Ireland 2018

Source publication: National Income and Expenditure 2018 Tables 1-22 and Annex 1 for 1995-2018 (XLS 396KB) , Gross Value Added for Foreign-owned Multinational Enterprises and Other Sectors Annual Results

Get the data: Statbank PIA04, Statbank PIA05

Over the period to 2018, gross value added increased annually at an average rate of 4.7%. A breakdown by sector indicates that 2.2% of GVA growth is accounted for by Manufacturing, which includes NACE sectors B-E. The second largest contributor to growth has been Remaining sectors, which includes all sectors not explicitly included above and contributed 1.1% to GVA growth. Information and Communication (J) was the third largest with a contribution of 0.8% and Professional Admin and Support Services was fourth making a 0.7% contribution to growth. The Foreign sector, which accounted for a large proportion of GVA growth, increased by an average of 2.8%, while the Domestic and Other sector increased by an average of 2% in the period to 2018. This publication also breaks down economic growth by inputs; capital input (measured as capital services) was responsible for almost all GVA growth during the period recording an increase of 4.2%. A small increase in labour input of 0.5% was recorded, while multi-factor productivity made practically no contribution to growth.

Source publication: National Income and Expenditure 2018 Tables 1-22 and Annex 1 for 1995-2018 (XLS 396KB) , Gross Value Added for Foreign-owned Multinational Enterprises and Other Sectors Annual Results

Get the data: Statbank PIA04, Statbank PIA05

Excluding the period with large globalisation events, the overall annual average growth in the economy for 2000 to 2014, falls to 2.9% compared to 4.7% for the entire period. For Manufacturing, for the period to 2014 the result is 0.7% compared to 2.1% for the entire period to 2018. GVA growth in the Foreign sector is lower in the period to 2014 with a result 1.2% recorded compared to 2.8% for the period to 2018. GVA growth in the Domestic and Other sector recorded a more modest fall in the period to 2014 to 1.7% compared to 2% for the entire period. 

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

Get the data: Statbank PIA04, Statbank PIA05

To better understand the developments in productivity in the economy, the charts above present the eighteen-year period broken out by stages in the economic cycle. The first section covers the period of the ‘Celtic Tiger’ and includes the onset of the recession in 2008. The second part covers the downturn years of 2009-2011, and this is followed in 2012 - 2014 by the return to growth in the economy. The period of 2015 to 2018 is presented separately because of the extreme changes that occurred in 2015.

The period 2000 to 2008, prior to the recession, was characterised by sustained annual average economic growth of about 4.4%. This growth was concentrated in the Domestic and Other sectors, reflecting the importance of Construction over the period. Capital services explain most of the improvements in productivity over the period growing at 3.3%, with labour playing only a small part.

Economic growth stood at -1.3% for the period 2009 to 2011. From a sectoral perspective, all sectors^[1] saw a fall in growth compared to the early noughties. Growth in the Domestic and Other sector declined at an annual average rate of 2%, while for growth in the Foreign sector an annual average rate of 0.7% was recorded. Capital services increased by an average of 1% over the period, with the fall in labour input offset by the growth in MFP and Capital Services.

The period from 2012 to 2014 saw positive annual average growth of 2.4%, driven by increased capital services. There was significant growth in both the Foreign sector and the Domestic and Other sector, while growth in the five economic sectors ranged from 0% to 1% in the two-year period.

The period 2015 to 2018 was dominated by a major increase in the industrial sector due to the relocation of large multinational companies to Ireland. From a productivity perspective, this was associated with a dramatic increase in capital services and a corresponding fall in multi-factor productivity. Growth of 9.6% was recorded in the Manufacturing sector, while growth of 0.9% was recorded in the Professional admin and support services sector over this three-year period.

[1] The Remaining sector includes all sectors not mentioned above.