Productivity in Ireland 2020

Source publication:  Estimates of the Capital Stock of Fixed Assets 2020

Get the data: PxStat CSA02

Figure 8.1 shows capital assets per employee for the total economy over the period 2011-2020. Capital assets per employee was €490,000 in 2020, an increase of 5.6% compared to 2019. This increasing trend is due to continued growth in capital assets in 2020, with growth of up to 6% across many of the asset categories such as Intangibles and Buildings & Structures. The majority of the additions to capital assets were due to increased investment in IPP in the ICT sector. Looking back over the time series since 2015, other significant changes that are due to IPP investment can be seen. Another factor contributing to the increase in capital assets per employee was the 1.5% fall in employment in 2020.

Get the data: PxStat CSA02 (Irish Capital Stocks), Eurostat (EU Capital Stocks), Eurostat (Employment)

Capital assets per employee is shown in Figure 8.2 and compares the two periods 2011 and 2020. The chart highlights the changing nature of capital assets per employee in the ten year period. In 2020, Ireland (€490,000) followed by Luxembourg (€448,000) and Austria (€353,000) recorded the largest level of capital assets per employee. All countries recorded a higher level of capital assets per employee in 2020, when compared to 2011, except for Belgium, Malta and Slovenia. Ireland had by far the largest increase in capital assets per employee in 2020 compared to 2011.

Get the data: PxStat CSA02 (Capital Stocks),  PxStat PIA12 (Capital Services)

Figure 8.3 illustrates capital intensity for each sector in the economy in 2020, where capital intensity measures capital services per employee. Sectors with high capital intensity use higher levels of capital relative to labour than sectors with low capital intensity. Aside from Real Estate (€1.2m per employee) the foreign MNE-dominated sectors of Manufacturing: Foreign (€1m per employee) and ICT (€525,000 per employee) had by far the highest levels of capital intensity in the economy in 2020. These were all far above the result for the total economy (€107,000 per employee). Almost every domestic sector was less capital intensive than the total economy average, highlighting the huge disparity between the foreign and domestic sectors when it comes to the use of capital services.

Get the data: PxStat CSA02 (Capital Stocks), PxStat PIA12 (Capital Services)

Capital services growth broken down by the contribution from each asset class [1] is shown in Figure 8.4. In 2020, a result of 6.6% was recorded, when compared to 2019. This result is almost entirely explained by the lower growth (5.8%) in intangible and Transport assets in 2020.  Looking at the graph for the period, it is the changes in intangible assets and Transport growth that are driving the changes in capital services growth, particularly since 2015.

[1] It is important to note that the asset categories of Transport and Intangible assets have been combined for 2015 and subsequent years to protect the confidentiality of data providers.

Get the data: PxStat CSA02 (Capital Stocks), PxStat PIA12 (Capital Services)

The capital services growth of 6.6% for the total economy is broken down by sector in Figure 8.5. The ICT sector (5.8%) made the largest contribution to total economy capital services growth. Wholesale & Retail (0.6%) followed by Manufacturing: Foreign (0.4%) provided the next largest contributions to capital services growth. Professional & Scientific (-0.4%) followed by Manufacturing: Domestic (-0.2%) made the most significant negative contributions to capital services in 2020. These industries are largely domestic facing and were some of the most impacted sectors during the pandemic, with little investment occurring.

Get the data: PxStat CSA02 (Capital Stocks), PxStat PIA12 (Capital Services)

Capital services growth for the Domestic & Other sector is analysed by asset type in the chart above. In 2020, capital services grew by 1.1%, less than 7.6% reported in 2019. The combined asset category (Transport and Intangible assets) experienced the biggest decline in investment in 2020. The biggest contributor to this overall result was Buildings & Structures (1%).

Get the data: PxStat CSA02 (Capital Stocks), PxStat PIA12 (Capital Services)

Figure 8.7 shows the contribution of the sectors to Domestic capital services growth. Wholesale & Retail (1.7%) made the largest contribution. Positive contributions from sectors such as Finance (0.2%), Construction (0.2%) and Accommodation & Food (0.1%) also contributed to the overall 1.1% domestic capital services result.

The main negative contributor to Domestic capital services came from the Professional & Scientific sector, with a contribution of (-1.1%). This negative contribution was largely associated with the large decline in investment in intangible assets in 2020. Other sectors such as Transport (-0.2%) and the Manufacturing: Domestic (-0.4%) also recorded negative contributions.

Get the data: PxStat CSA02 (Capital Stocks), PxStat PIA12 (Capital Services)

The chart above shows capital services growth in the Foreign sector for the period 2011-2020. The chart is presented for illustrative purposes to show the dominance of intangible assets in explaining capital services growth in the sector. In 2020 capital services growth of 9.8% was recorded, down on the 23.7% result in 2019. This result can be explained entirely by the lower growth in intangible assets in Manufacturing: Foreign.

Get the data: PxStat CSA02 (Irish Capital Stocks) and Eurostat

Figure 8.8 shows the average annual growth in capital assets for the period 2011-2020 for a selection of countries. Ireland: Foreign (22.4%) had by far the largest growth over the period. This significant result is largely explained by the large imports of intellectual property products over the period 2015 to 2020. The result for Ireland (7.4%) is similarly impacted. Ireland-Domestic (3.4%) reported a result more in line with EU countries such as Malta (2.6%), Luxembourg (3%) and Croatia (2.5%).