In this Chapter labour productivity is presented for the overall economy, the Domestic and Other sector[1] and the Foreign-dominated sector, as well as the Market sector. Labour productivity growth is the change in GVA per hour worked. An increase in labour productivity indicates that the workforce is becoming more efficient in the economy. Analysis of Ireland’s relative position with its EU counterparts in terms of labour productivity is included.
[1] The Domestic and Other Sector comprises all sectors other than the Foreign dominated sectors in Manufacturing and Information and Communications. See Gross Value Added for Foreign-Owned Multinational Enterprises and Other Sectors Annual Results for more information.
Labour Productivity | |
2000 | 3.92814228997711 |
2001 | 1.14773009204607 |
2002 | 5.35244075419118 |
2003 | 0.355288829012345 |
2004 | 2.33802896866304 |
2005 | 0.686109880955586 |
2006 | 0.182061973990311 |
2007 | 3.98233329736638 |
2008 | -0.513143162482669 |
2009 | 3.31721841595746 |
2010 | 11.126632891685 |
2011 | 2.15973521227367 |
2012 | -1.64961216327247 |
2013 | -1.80297061655683 |
2014 | 3.9155387019986 |
2015 | 18.5300743705763 |
2016 | -1.73588403890128 |
2017 | 3.57636514495565 |
2018 | 5.64744296559855 |
2019 | 3.11643945934024 |
Source publication: National Income and Expenditure 2019
Get the data: PxStat PIA09
Overall labour productivity for the period 2000 to 2019 increased by an average rate of 3.2%. Labour productivity growth declined from 5.6% in 2018 to 3.1% in 2019 and was largely driven by reduced GVA growth in the Manufacturing and Information and Communications (ICT) sectors. Nevertheless, the result is a continuation of the positive results seen since 2016, with average labour productivity growth over the last three years of 4.2%. The extreme globalisation-related events of 2015 in the Irish economy contributed significantly to labour productivity growth in the same year of just under 20%.
X-axis label | Percentage Contribution |
---|---|
Professional Scientific, Admin and Support Services | -0.174293580148732 |
Education | -0.0991718184740511 |
Financial and Insurance Activities | -0.0436840965030868 |
Electricity, Gas and Steam | -0.0358728761481832 |
Transport and Storage | -0.00930948809379542 |
Mining and Quarrying | 0.00152988854816419 |
Human Health and Social Work | 0.0040691222076478 |
Public Admin and Defence | 0.00596202141954027 |
Water Supply Sewerage Waste Management | 0.0179910972199776 |
Accommodation and Food Service Activities | 0.0352560880855977 |
Arts Entertainment and Recreation | 0.0490341230379678 |
Construction | 0.135960346703443 |
Wholesale and Retail | 0.273025374229263 |
Agriculture Forestry Fishing | 0.274365606136505 |
Manufacturing | 0.428088175274993 |
Real Estate | 0.542883809126455 |
Information and Communications | 1.71051201352407 |
Total | 3.11634580614578 |
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The chart above shows the contribution of sectors in the economy to total labour productivity growth in 2019. The largest sectors that contribute to the 3.1% result are ICT, Real Estate[2] and Manufacturing. The strong growth in Agriculture reflects the GVA increase of 25% in 2019 for the sector, the largest recorded since 2000. The Wholesale and Retail sector also recorded positive results in line with the trend for the Retail Sales Index in 2019. The positive contribution of the Construction sector was on the back of a year which saw GVA growth of 7.2% and growth in completions of new dwellings of 18%.
The main negative contributor to growth in 2019 was the Professional, Scientific, Admin & Support Services sector, largely due to hours growth of 5.1% growing faster relative to GVA growth of 3.4%. A negative contribution was recorded in the Education sector, however, too much emphasis should not be placed on results for these non-market sectors as Output and Value added are estimated by summing input costs. For example, increased hours worked in the Education sector lead to reduced pupil teacher ratios, hence improving outcomes rather than improving productivity.
[2] The Real Estate result should be interpreted with caution as it includes a significant contribution from imputed rents. For more information please see National Accounts Explained.
X-axis label | Labour Productivity | Hours | GVA |
---|---|---|---|
2000 | 3.92814228997711 | 3.91198794088393 | 7.84013023086105 |
2001 | 1.14773009204607 | 2.58807119238351 | 3.73580128442957 |
2002 | 5.35244075419118 | 0.554497917347396 | 5.90693867153859 |
2003 | 0.355288829012345 | 0.916605143437364 | 1.2718939724497 |
2004 | 2.33802896866304 | 2.72368589124087 | 5.06171485990391 |
2005 | 0.686109880955586 | 5.21727836602579 | 5.90338824698138 |
2006 | 0.182061973990311 | 4.28559126995682 | 4.46765324394714 |
2007 | 3.98233329736638 | 3.53678084162263 | 7.51911413898902 |
2008 | -0.513143162482669 | -1.76594448856839 | -2.27908765105105 |
2009 | 3.31721841595746 | -9.92108649051276 | -6.60386807455529 |
2010 | 11.126632891685 | -9.29542474081738 | 1.83120815086762 |
2011 | 2.15973521227367 | -1.2803581825506 | 0.879377029723101 |
2012 | -1.64961216327247 | -0.471671705464905 | -2.12128386873738 |
2013 | -1.80297061655683 | 3.22817151064889 | 1.42520089409205 |
2014 | 3.9155387019986 | 3.43894111778647 | 7.35447981978506 |
2015 | 18.5300743705763 | 4.32246969923244 | 22.8525440698088 |
2016 | -1.73588403890128 | 3.21579058113568 | 1.47990654223439 |
2017 | 3.57636514495565 | 3.63781871937864 | 7.21418386433428 |
2018 | 5.64744296559855 | 3.51470657597334 | 9.16214954157192 |
2019 | 3.11643945934024 | 2.24811606469193 | 5.36455552403217 |
Get the data: PxStat PIA09
In 2019, labour productivity growth of 3.1% was reported. The 2019 result is due to an increase of 5.4% in GVA growth in the economy, while hours worked increased by 2.3%. Since 2016 the GVA growth has outpaced the growth in hours worked resulting in positive labour productivity growth for the period.
The period 2000 to 2008 recorded average GVA growth of 4% and associated average growth in hours of 2%, resulting in labour productivity growing annually by 2% over the eight-year period. Labour productivity growth declined in 2011 and became negative in 2012 and 2013, due to increasing hours worked and falling levels of value added produced.
X-axis label | Labour Productivity | Hours | GVA |
---|---|---|---|
2000 | 2.02098416057904 | 4.00150578609437 | 6.0224899466734 |
2001 | 0.487172899962453 | 2.49525246737727 | 2.98242536733974 |
2002 | 1.49119647187268 | 1.11575317280715 | 2.60694964467983 |
2003 | 1.72621311656294 | 1.68077689342855 | 3.40699000999149 |
2004 | 2.56482673219153 | 3.15875344520909 | 5.72358017740064 |
2005 | -0.719475337791208 | 5.6591238153239 | 4.93964847753269 |
2006 | -0.438152588869708 | 4.68504499871664 | 4.24689240984691 |
2007 | 2.73909542307277 | 4.0569382349082 | 6.79603365798097 |
2008 | -0.0137202977289695 | -1.975769440922 | -1.98948973865097 |
2009 | 1.77097070375158 | -10.9817120396448 | -9.21074133589325 |
2010 | 9.30609758446673 | -8.81829080565121 | 0.487806778815531 |
2011 | 2.76801884449332 | -1.60549320778225 | 1.16252563671109 |
2012 | -2.16770611858145 | -0.662016654342212 | -2.82972277292368 |
2013 | -0.937499218669021 | 3.17912065609001 | 2.241621437421 |
2014 | 2.50916777768939 | 3.39413280665736 | 5.90330058434676 |
2015 | 1.49982088338856 | 4.335091659691 | 5.83491254307955 |
2016 | -0.943938352442979 | 3.05067830218086 | 2.1067399497379 |
2017 | 1.97006654567536 | 3.60136258556631 | 5.57142913124166 |
2018 | 0.970365055289202 | 3.7256718015258 | 4.69603685681501 |
2019 | 1.7967948430814 | 2.20729314398594 | 4.00408798706737 |
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Labour productivity growth for the Domestic and Other Sector in 2019 was 1.8%, a doubling of the 2018 result. This was due to strong growth in Agriculture, Construction as well as in sectors such as Accommodation and Food. Looking at the previous years, labour productivity growth peaked in 2010 at 9.3%. This is explained by large falls in employment particularly in Construction. For the period 2014-2019, labour productivity growth has returned to pre-crisis results.
X-axis label | Accommodation and Food Service Activities | Construction | Transport | Wholesale and Retail | Domestic | Human Health and Social Work |
---|---|---|---|---|---|---|
2000 | 100 | 100 | 100 | 100 | 100 | 100 |
2001 | 103.797968805731 | 97.2871383667617 | 95.7579188796606 | 94.3827865291142 | 100.488361516557 | 99.1759932866977 |
2002 | 102.50274814042 | 98.4770629205217 | 96.829092329984 | 95.1302165458434 | 101.998068793344 | 99.8982419573023 |
2003 | 104.280961702156 | 101.550581195651 | 101.372538892192 | 94.5465275374871 | 103.774057409 | 99.6904691466411 |
2004 | 107.806553084515 | 100.640281811297 | 100.213443389328 | 93.4522429437827 | 106.470108904756 | 103.451714369631 |
2005 | 104.542064981967 | 97.1313092045816 | 102.503327228401 | 93.3183907932112 | 105.70683181682 | 102.716251436552 |
2006 | 103.34953301255 | 90.9825157228552 | 109.408487488037 | 96.4275023178457 | 105.244687783969 | 106.337671318399 |
2007 | 103.028782202027 | 89.3392052670139 | 112.742412940248 | 103.000450410499 | 108.167283833038 | 108.867860224663 |
2008 | 110.219047489419 | 97.1214640099414 | 113.768778676156 | 97.3095800072545 | 108.15244397771 | 110.722986388842 |
2009 | 104.099593783819 | 111.620553899435 | 100.587883173181 | 96.1779175134785 | 110.084852767267 | 111.498450273199 |
2010 | 103.510031734598 | 127.98512133845 | 109.622191695793 | 92.5454890863784 | 120.821280499723 | 117.816114133369 |
2011 | 110.589007047794 | 118.951275603656 | 111.687226721319 | 91.0661675752925 | 124.212352553695 | 121.81827786556 |
2012 | 106.791897458988 | 126.656849926201 | 117.63303698259 | 89.1833072426139 | 121.548767435766 | 120.779586028797 |
2013 | 104.931555361245 | 133.576986479621 | 118.676620906719 | 87.7667635194731 | 120.414573527327 | 122.766881241054 |
2014 | 103.175102057128 | 121.803418181085 | 120.482815382922 | 92.0611051224323 | 123.474202290565 | 120.081792076043 |
2015 | 106.325685815729 | 112.456566710109 | 120.824244621015 | 96.4896046470949 | 125.340051383103 | 120.577800924192 |
2016 | 106.591832747609 | 112.499095862328 | 125.352067037242 | 101.672361107568 | 124.162485060807 | 120.767894318553 |
2017 | 106.68300785221 | 116.687317497629 | 126.821158155564 | 103.232368639466 | 126.632822388247 | 120.960438881794 |
2018 | 106.972351024755 | 114.860709734345 | 127.647092750422 | 105.710483321759 | 127.867604302338 | 118.409649598489 |
2019 | 109.397661635363 | 121.610993651177 | 127.012727651592 | 107.406281872147 | 130.185887851438 | 118.52238516728 |
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The performance of a selection of domestic sectors in terms of labour productivity is illustrated in the above graph. Among the sectors under examination since 2000, the trend in Wholesale and Retail has been increasing steadily since 2013. A large dip occurred between 2009 and 2013, as discretionary spending fell during the recessionary period, reducing hours and GVA. On the other hand, a noticeably positive trend developed in the Construction sector during the crisis period, which is a feature of productivity measurement at extreme times in the economic cycle. Sharp increases in unemployment occurred while at the same time the small remaining workforce became more productive. For the period 2014-2019 a growth of 1.1% in general for labour productivity is evident in the Domestic and Other sector.
X-axis label | Labour Productivity | Hours | GVA |
---|---|---|---|
2000 | 9.48568510820182 | 3.20383632830202 | 12.6895214365038 |
2001 | 2.51002358587067 | 3.32222748160101 | 5.83225106747167 |
2002 | 18.0672397251962 | -3.98019222557244 | 14.0870474996237 |
2003 | 1.44779300800261 | -5.65283279683719 | -4.20503978883458 |
2004 | 4.24468310252531 | -1.24298177929938 | 3.00170132322593 |
2005 | 8.06129731893091 | 1.00219192409167 | 9.06348924302259 |
2006 | 4.96083744136558 | 0.298618187455244 | 5.25945562882082 |
2007 | 12.2686367383227 | -1.93103901732477 | 10.3375977209979 |
2008 | -3.95759581277394 | 0.479244253117589 | -3.47835155965634 |
2009 | 2.28714099666207 | 0.651342718443426 | 2.9384837151055 |
2010 | 19.7042005994031 | -13.8999959100107 | 5.80420468939245 |
2011 | -1.88240440669635 | 1.88259796675161 | 0.00019356005528415 |
2012 | -1.47521051246824 | 1.33003006894252 | -0.145180443525704 |
2013 | -4.65232383593368 | 3.6866993327526 | -0.965624503181106 |
2014 | 7.75254692979282 | 3.85578467907494 | 11.6083316088678 |
2015 | 56.3029148375772 | 4.20524446229265 | 60.5081592998699 |
2016 | -4.14597233280994 | 4.73735014597378 | 0.591377813163842 |
2017 | 5.66427753780778 | 3.9703406945622 | 9.63461823236997 |
2018 | 13.6704601629312 | 1.57325410215879 | 15.24371426509 |
2019 | 4.51357779519656 | 2.62707209576069 | 7.14064989095726 |
Get the data: PxStat PIA09
Labour productivity growth of 4.5% was recorded in 2019 in the Foreign sector. This was a largely due to declines in the MNE-dominated sectors of Manufacturing and ICT, while hours worked remained relatively stable. Labour productivity in the Foreign sector is almost entirely driven by swings in GVA, while hours worked remain relatively consistent over the period, particularly since 2011.
X-axis label | Foreign | Manufacturing | Information and Communications |
---|---|---|---|
2000 | 100 | 100 | 100 |
2001 | 102.541789901694 | 105.794490507692 | 100.368831722113 |
2002 | 122.847385795979 | 124.478024236589 | 108.212896907705 |
2003 | 124.638899066765 | 126.50190354878 | 106.100102177436 |
2004 | 130.043314081503 | 128.875352369813 | 129.398848641883 |
2005 | 140.960618985683 | 138.135389941241 | 133.813867963342 |
2006 | 148.129801685621 | 143.084566939199 | 144.473675964127 |
2007 | 167.465154232518 | 150.978782739183 | 169.62757429657 |
2008 | 160.966993888265 | 143.348706085966 | 182.880928439314 |
2009 | 164.690959839667 | 149.411960645074 | 193.111840128308 |
2010 | 200.559859442207 | 188.350957622685 | 247.296291609261 |
2011 | 196.819823548064 | 196.35700799223 | 240.571661274398 |
2012 | 193.937628313533 | 195.560522286187 | 238.217157378146 |
2013 | 185.121684974868 | 178.623892031851 | 249.254729137451 |
2014 | 200.04429854959 | 189.907745459605 | 280.911504880267 |
2015 | 351.274504932142 | 343.171502202864 | 318.1896917403 |
2016 | 337.008536137947 | 321.665131818512 | 325.978512734886 |
2017 | 356.64861850884 | 331.903125500811 | 379.966495925242 |
2018 | 408.89387041191 | 370.025167547928 | 472.027747099775 |
2019 | 427.772458322108 | 377.208647949082 | 534.265465988904 |
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The above chart shows labour productivity in sectors that are dominated by MNEs. Both the Manufacturing and ICT sectors have experienced sharp and substantial increases in productivity since 2000. During the recessionary period of 2010 onwards, the ICT sector remained ahead of the Manufacturing sector in terms of productivity. The Manufacturing and overall Foreign sectors have followed a very similar trend up to 2019. This is due to the Foreign sector being largely dominated by sectors from Manufacturing such as Electronic Equipment, Pharmaceutical Products and Medical Devices.
X-axis label | Foreign | Domestic and Other | Total |
---|---|---|---|
2000 | 100 | 100 | 100 |
2001 | 102.541789901694 | 100.488361516557 | 101.154341784479 |
2002 | 122.847385795979 | 101.998068793344 | 106.716084758646 |
2003 | 124.638899066765 | 103.774057409 | 107.095909424375 |
2004 | 130.043314081503 | 106.470108904756 | 109.629343618765 |
2005 | 140.960618985683 | 105.70683181682 | 110.384107672218 |
2006 | 148.129801685621 | 105.244687783969 | 110.585258211405 |
2007 | 167.465154232518 | 108.167283833038 | 115.077995929998 |
2008 | 160.966993888265 | 108.15244397771 | 114.488993567484 |
2009 | 164.690959839667 | 110.084852767267 | 118.350537372329 |
2010 | 200.559859442207 | 120.821280499723 | 132.279512851759 |
2011 | 196.819823548064 | 124.212352553695 | 135.167473970514 |
2012 | 193.937628313533 | 121.548767435766 | 132.956025191562 |
2013 | 185.121684974868 | 120.414573527327 | 130.580347861351 |
2014 | 200.04429854959 | 123.474202290565 | 135.794690543992 |
2015 | 351.274504932142 | 125.340051383103 | 163.439821841093 |
2016 | 337.008536137947 | 124.162485060807 | 160.627178798668 |
2017 | 356.64861850884 | 126.632822388247 | 166.475753053977 |
2018 | 408.89387041191 | 127.867604302338 | 176.147920804803 |
2019 | 427.772458322108 | 130.185887851438 | 181.723898820901 |
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Figure 2.8 shows a comparison of Labour productivity in the Foreign and Domestic and Other sector. As evident from the graph the Foreign sector vastly outpaces the Domestic and Other sector in terms of labour productivity growth. The globalised nature of the Foreign sector results in extraordinary average growth in labour productivity of 7.9% over the same period. A very different picture of labour productivity growth is evident in the Domestic and Other sector with average growth of 1.4% in the period 2000-2019. This puts into context the relative productivity performance of the individual sectors in these two aggregate groupings.
X-axis label | Growth Market sector |
---|---|
2000 | 5.00808802565187 |
2001 | 1.87606610002749 |
2002 | 6.91613750637468 |
2003 | 0.0891649890403355 |
2004 | 2.58246690410963 |
2005 | 1.66668836493837 |
2006 | -0.011045627068977 |
2007 | 5.20682666838205 |
2008 | 0.365417761030789 |
2009 | 5.18838911827599 |
2010 | 13.5747854365945 |
2011 | 1.34716444780413 |
2012 | -2.00896524150308 |
2013 | -2.68482217953959 |
2014 | 5.44389596391684 |
2015 | 23.8256609602903 |
2016 | -2.46931085867709 |
2017 | 4.76979829364579 |
2018 | 7.28313547034192 |
2019 | 4.19532678553301 |
Get the data: PxStat PIA09
The Market sector includes all NACE sectors in the economy except for Public Admin and Defence, Education, Health and Social Work and Real Estate. This aggregate sector recorded labour productivity growth of 4.2% in 2019, mainly driven by the level of GVA growth in the Foreign dominated sectors such as ICT and Manufacturing in 2019. Labour productivity in this sector, taking the entire nineteen-year period as a whole, averaged growth of 4.1% per annum.
X-axis label | Average Annual Contribution |
---|---|
Financial and Insurance Activities | -0.187884398602786 |
Education | -0.0224128212511174 |
Mining and Quarrying | -0.0161613084623095 |
Construction | -0.0112710062897818 |
Public Admin and Defence | -0.00893472192036276 |
Human Health and Social Work | 0.003446552769443 |
Water Supply Sewerage Waste Management | 0.00437963726655834 |
Accommodation and Food Service Activities | 0.0107121830755063 |
Electricity, Gas and Steam | 0.0248198936180635 |
Arts Entertainment and recreation | 0.0250856264226538 |
Transport and Storage | 0.0409513172258332 |
Agriculture Forestry Fishing | 0.0614803727923672 |
Real Estate | 0.103421600212491 |
Wholesale and Retail | 0.156649861926367 |
Professional Scientific, Admin and Support Services | 0.343818248875216 |
Information and Communications | 0.901677129199529 |
Manufacturing | 2.16177370458275 |
Total | 3.59155187144042 |
Get the data: PxStat PIA09
The chart above shows average contributions to total labour productivity growth from 2010 to 2019 for the whole economy. Manufacturing[1] made the largest contribution, followed by Information and Communications and Professional, Scientific, Admin and Support Services. These sectors have consistently contributed significantly more to labour productivity growth due to the large amount of MNE activity associated with them. The only significant negative contribution to total labour productivity growth over the nine-year period came from the Financial and Insurance sector. This was due to negative GVA growth recorded in the sector, particularly in 2016.
The Construction sector, the Wholesale and Retail sector and the Agriculture sector contributed very little to growth over the entire period to 2019. Construction and Wholesale and Retail recorded particularly poor results for labour productivity during the financial crisis. The Construction sector experienced high unemployment, while the Wholesale and Retail sector recorded negative GVA growth in 2011 and 2012, due to falling retail sales and less discretionary spending.
[1] It should be noted, however, that the large additions to GVA from Manufacturing occur even when the impact of globalisation events in 2015 are excluded.
X-axis label | Average Annual 2010 to 2019 |
---|---|
Greece | -1.34019797561207 |
Luxembourg | 0.0992862899426239 |
Italy | 0.166651047872945 |
Netherlands | 0.298175703064985 |
Belgium | 0.472355100468191 |
Cyprus | 0.513757375391322 |
Portugal | 0.548482762136149 |
Finland | 0.564143433987518 |
Austria | 0.685006576563429 |
Euro area (19 countries) | 0.810984543429782 |
Spain | 0.822713915070494 |
Ireland Domestic and Other | 0.832903977701593 |
Sweden | 0.846528452589168 |
Germany | 0.92839841044694 |
European Union | 1.01971422411935 |
Hungary | 1.29084352520401 |
Denmark | 1.44878553671188 |
Czechia | 1.71963065947562 |
Bulgaria | 2.81761752292031 |
Lithuania | 2.85802388368313 |
Ireland | 3.59205439894798 |
Romania | 4.40061473584306 |
Ireland Foreign | 8.78076012941746 |
Get the data: Eurostat (EU Data), PxStat PIA09 (CSO Data)
Average labour productivity for the period 2010 to 2019 for Ireland as a whole was 3.6%[1] which far higher than the EU average of 1.0% and the Euro Area average of 0.8%. However, it is important to highlight the Ireland Domestic and Other sector (0.8%) is reporting similar results in line with other EU member states. As highlighted previously in this chapter Ireland – Foreign drives this extraordinary growth (8.8%) in labour productivity for the total economy. This emphasises the importance of looking beyond the national aggregate rate and focusing on the Domestic and Other sector.
[1] CSO estimates are included for Ireland to allow subsectors Ireland-Foreign and Ireland-Domestic and Other to be calculated.
Go to the next chapter: Labour Productivity - Breakdown by MFP and Capital