Productivity in Ireland 2019

Source publication: National Income and Expenditure 2019, Gross Value Added for Foreign-owned Multinational Enterprises and Other Sectors Annual Results 2019

Get the data: PxStat PIA09

Over the period from 2000 to 2019, gross value added increased annually at an average of 4.3%. Looking at the breakdown of the sectors, the largest contribution is accounted for by Manufacturing at 1.6%. The second largest contributor to GVA growth was from the Remaining Sectors^[1] with the result of 1.0%. Information and Communications was the third largest contributor at 1.0%, while Professional, Admin and Support services made the lowest contribution to GVA growth at 0.6%. The Foreign sector accounted for the largest proportion of average GVA growth at 2.6%, while the Domestic and Other sector accounted for 1.8%. 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 4.7%. A small increase in labour input of 0.4% was recorded, while multi-factor productivity contributed negatively to growth at -0.7%.

[1] Remaining sectors consists of: Agriculture, Forestry and Fishing, Mining and Quarrying, Electricity, Gas and Steam, Water Supply, Sewerage and Waste Management, Wholesale and Retail, Transport and Storage, Accommodation and Food, Financial and Insurance, Real Estate, Public Admin and Defence, Education, Human Health and Social Work, Arts, Other Services, Activities of Households as Employers.

Source publication: National Income and Expenditure 2019, Gross Value Added for Foreign-owned Multinational Enterprises and Other Sectors Annual Results 2019

Get the data: PxStat PIA09

Excluding the period with large globalisation events and looking only at the most recent years, the overall average growth in the economy for 2016 to 2019, rises to 7.5% compared to 4.3% for the entire period. The contribution of Manufacturing increased, compared to the overall period, recording average contribution of 2.1%, while Information and Communications makes the largest contribution to GVA growth in the period, recording an average result of 2.9%. Similar to the entire period, the Foreign sector contributed most to GVA growth between 2016-2019, with an average result of 4.7%, while the Domestic and Other sector reported a result of 2.8%. On the inputs side, Capital Services contributed positively to the GVA result at 3.6%, followed by MFP at 2.7% and Labour input making the lowest contribution at 1.1%.

Source publication: National Income and Expenditure 2019

Get the data: PxStat PIA09

To better understand the developments in productivity in the economy, the charts above present the nineteen-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 2008-2011, and this is followed in 2011-2014 by the return to growth in the economy. The period of 2014 to 2019 is presented separately because of the extreme changes in the economy that occurred in 2015.

The period 2000 to 2008, prior to the recession, was characterised by sustained average economic growth of about 4.0%. This growth was concentrated in the Domestic and Other sectors, reflecting the importance of Construction over the period. Capital input explain most of the improvements in productivity over the period, with an average contribution to total GVA growth of 3.5%.

Average economic growth stood at -1.3% for the period 2008 to 2011. All sectors presented in the chart above saw a fall in growth compared to the early noughties. The average contribution to growth in the Domestic and Other sector was -2.0%, while an average contribution in the Foreign sector of 0.7% was recorded. There was a large fall in contribution of Labour of 3.7%, partially offset by the growth in MFP and Capital Services.

The period from 2011 to 2014 saw positive average growth of 2.2%, driven by increased Capital input growth. There were positive growth contributions for both the Foreign sector (0.8%) and Domestic and Other sector (1.4%) of the economy during the period. Growth in the five economic sectors (Manufacturing, Information and Communications, Construction, Professional Admin & Support Services and Remaining sectors) ranged from 0% to 1% in the three-year period.

The period 2014 to 2019 was dominated by a combination of globalisation events which lead to major increases particularly in the industrial sector due to the relocation of large multinational companies to Ireland. From a productivity perspective, this was associated with an increase in Capital input of 10.7%.