This release was compiled during the COVID-19 crisis. The results contained in this release reflect some of the economic impacts of the COVID-19 situation.The full series of information notes on the implications of COVID-19 on the National Accounts can be found on our Information Notes page.
Capital services are the measure of the flow of productive services from capital assets such as Factories, Machinery and Equipment and Intangible Assets. In the same way that labour contributes to the production process through hours worked, capital services are a measure of the contribution of capital. Capital services are therefore a key indicator which explain economic growth in the Irish economy.
This chapter explains how the level of capital assets has evolved over recent years, as well as detailing the main developments in capital services across the economy. The chapter also includes international comparisons for these measures to provide context to the results presented.
| Timeperiod | Domestic Sector | Foreign Sector | Total Economy |
|---|---|---|---|
| 2011 | 298000 | 224000 | 270000 |
| 2012 | 305000 | 236000 | 277000 |
| 2013 | 301000 | 240000 | 274000 |
| 2014 | 310000 | 248000 | 282000 |
| 2015 | 323000 | 1343000 | 417000 |
| 2016 | 318000 | 1371000 | 418000 |
| 2017 | 321000 | 1255000 | 417000 |
| 2018 | 335000 | 1183000 | 426000 |
| 2019 | 348000 | 1433000 | 467000 |
| 2020 | 362000 | 1542000 | 505000 |
| 2021 | 345000 | 1300000 | 469000 |
Get the data: PxStat PIA15
Figure 9.1 shows capital assets per employee for the total economy and the Foreign and Domestic sectors over the period 2011-2021. Changes in capital assets per employee indicate changes in the level of capital assets in the economy relative to total employment, so increases in this indicator reflect that an economy is becoming more capital-intensive. Capital assets per employee were €469,000 in 2021, a decrease of 7.6% compared to 2020. This marked the first decrease since 2017, and was largely explained by decreased investment in intangible assets, specifically intellectual property products (IPP). Capital assets per employee were far higher for the Foreign sector (€1.3m per employee) than for the Domestic sector (€345,000 per employee)1, although both sectors saw decreases in this measure when compared to 2020 (Foreign: -17.1%; Domestic: -7.6%).
Prior to 2021, the level of capital assets per employee had been rapidly increasing, particularly in 2014-2015 and 2018-2020 due to imports of IPP in the Foreign sector. There is a significant depreciation2 charge associated with these assets each year, which has the effect of reducing the level of capital assets in the economy. Capital assets per employee fell in 2021 as this was the first year that the level of additions to the capital stock fell short of the level of depreciation.
1 Capital assets per employee for the Domestic Market sector was €215,000 per employee in 2021.
2 In National Accounts, depreciation is termed as Consumption of Fixed Capital (CFC).
| label | Ireland | EU Countries |
|---|---|---|
| Ireland - Foreign | 1300000 | 0 |
| Ireland | 469000 | 0 |
| Denmark | 0 | 348000 |
| Ireland - Domestic | 345000 | 0 |
| Finland | 0 | 310000 |
| Belgium | 0 | 293000 |
| France | 0 | 287000 |
| Germany | 0 | 261000 |
| Netherlands | 0 | 253000 |
| Italy | 0 | 242000 |
| Slovakia | 0 | 179000 |
| Czechia | 0 | 162000 |
| Croatia | 0 | 149000 |
| Slovenia | 0 | 138000 |
| Malta | 0 | 129000 |
Get the data: PxStat PIA15 (Irish Data) and Eurostat (Capital Stocks and Employment)
Figure 9.2 shows capital assets per employee for a selection of EU countries in 2021. Ireland had the highest level of capital assets per employee at €469,000 per employee, followed by Denmark at €348,000 per employee. Malta had the lowest level of capital assets per employee among the selection of countries shown at €129,000 per employee.
Get the data: PxStat PIA15 (Irish Data) and Eurostat (Capital Stocks and Employment)
A comparison of capital assets per employee by sector in 2021 for Ireland and other EU countries for which data is available is shown in Figure 9.3. Ireland had the highest level of capital assets per employee (€469,000 per employee) in 2021, considerably higher than any of the countries shown. Ireland’s most capital-intensive sectors tended to be those heavily influenced by globalisation, with most domestic sectors being far less capital intensive than the total economy average.
Ireland was a significant outlier for several sectors when compared to EU countries, most notably for Admin & Support (€1.5m per employee), which was almost fifteen times higher than the next highest country shown. This was due to the scale of aircraft-leasing assets owned by Ireland. Ireland’s Manufacturing (€1m per employee) and Information & Communications (€940,000 per employee) sectors were also far more capital intensive when compared to their European peers.
The level of capital assets per employee for domestic sectors was generally lower compared to EU countries such as Accommodation & Food (€40,000 per Employee) and Construction (€27,000 per employee).
Get the data: PxStat PIA15 (Irish Data) and Eurostat (Capital Stocks and Employment)
Figure 9.4 illustrates average growth in capital assets per employee across the Irish economy for the period 2011-2021, and also includes data from comparable EU countries. Ireland’s level of capital assets per employee for the total economy grew by 5.3% per year over the period 2011-2021, over three times faster than the next highest EU country shown (Czechia: 1.6% per year). Capital stocks per employee grew fastest over the period for Manufacturing (17.5% per year), Information & Communication (14% per year), Professional, Scientific & Technical Activities (12.2% per year) and Admin & Support (9.7% per year). For each of these sectors, their average annual growth in capital assets per employee far outpaced equivalent sectors in the EU.
There were more modest increases in capital assets per employee for domestic Irish sectors such as Human Health & Social Work (2.5% per year) and Wholesale & Retail (1.9% per year). Several domestic sectors also saw falls in the level of capital assets per employee over the period, such as Construction (-2.5% per year) and Education (-3.2% per year). For the overall Foreign sector, capital assets per employee grew by 16.4% per year, with the Domestic growing by 1.6% per year.
| Timeperiod | Cultivated Assets | Dwellings | Intangible Assets | Other Buildings and Structures | Other Machinery and Equipment | Transport Equipment | Total |
|---|---|---|---|---|---|---|---|
| 2011 | 0 | 0 | 1.2 | 0.7 | 0.7 | 0 | 2.7 |
| 2012 | 0 | -0.1 | 3.1 | 1 | 0 | 0.2 | 4.2 |
| 2013 | 0 | -0.1 | 1.6 | 1 | 1.2 | 0.1 | 3.8 |
| 2014 | 0 | 0 | 2.8 | 0.9 | 1.5 | 1.9 | 7 |
| 2015 | 0 | 0 | 88 | 0.9 | 1.1 | 0.4 | 90.4 |
| 2016 | 0 | 0 | 10.1 | 0.7 | 0.3 | 1 | 12.1 |
| 2017 | 0 | 0.1 | 4.9 | 0.7 | 0.1 | 1.1 | 6.8 |
| 2018 | 0 | 0.1 | 2.7 | 0.8 | 0.5 | 2.2 | 6.2 |
| 2019 | 0 | 0.1 | 13.8 | 0.7 | 0.4 | 1.5 | 16.4 |
| 2020 | 0 | 0.1 | 6 | 0.6 | 0.4 | -0.1 | 6.9 |
| 2021 | 0 | 0.1 | -3.8 | 0.4 | 1 | -0.1 | -2.4 |
Get the data: PxStat PIA15
Capital services (not to be confused with capital assets3) for the total economy fell by 2.4% in 2021, marking the first decrease in capital services using available data. As previously explained, the decrease in capital services was due to the level of investment in capital assets falling short of the level of depreciation for the year. Capital services growth in the Irish economy has been dominated by Intangibles which consists mainly of IPP. This asset category has accounted for virtually all of the growth in capital services since 2015, but saw relatively lower investment in 2021, leading to a negative contribution of -3.8% to total capital services growth.
As the level of both Intangible Assets and Transport Assets are so large in the economy, movements in the other asset categories tend to have a far less pronounced impact on overall capital services, with asset categories such as Other Buildings & Structures and Other Machinery & Equipment generally making a contribution of less than 1% to capital services growth each year.
3 Capital services are the flow of productive services from capital assets rather than the level of the assets themselves. They are somewhat analogous to hours worked in that hours worked are the flow of productive services from employees.
| Timeperiod | Cultivated Assets | Dwellings | Intangible Assets | Other Buildings and Structures | Other Machinery and Equipment | Transport Equipment | Intangible Assets + Transport Assets | Total |
|---|---|---|---|---|---|---|---|---|
| 2011 | 0 | 0 | 1.5 | 0.9 | 0.6 | 0.3 | 0 | 3.3 |
| 2012 | 0 | -0.1 | 0.7 | 1.4 | 0 | 0.5 | 0 | 2.4 |
| 2013 | 0 | -0.1 | 1.3 | 1.2 | 0.8 | 0.2 | 0 | 3.4 |
| 2014 | 0 | -0.1 | 2.4 | 1.1 | 0.9 | 2.9 | 0 | 7.3 |
| 2015 | 0 | 0 | 0 | 1.4 | 0.9 | 0 | 10.7 | 12.9 |
| 2016 | 0 | 0 | 0 | 1.3 | 0.2 | 0 | 1.8 | 3.3 |
| 2017 | 0 | 0.1 | 0 | 1.4 | -0.1 | 0 | 4.2 | 5.7 |
| 2018 | 0 | 0.2 | 0 | 1.1 | -0.6 | 0 | 5.7 | 6.5 |
| 2019 | 0 | 0.2 | 0 | 1.3 | -0.4 | 0 | 4.3 | 5.4 |
| 2020 | 0 | 0.2 | 0 | 1 | 0.2 | 0 | -0.9 | 0.4 |
| 2021 | 0 | 0.2 | 0 | 0.8 | 1 | 0 | -2.2 | -0.2 |
Get the data: PxStat PIA15
Figure 9.6 shows capital services growth for the Domestic sector. In 2021, capital services in the Domestic sector fell by 0.2%, the first decline in the series since 2000. The combined asset category (Intangible Assets & Transport Assets4) generally drives growth in the Domestic sector, however it made negative contributions of -2.2% and -0.9% in 2021 and 2020 respectively. Other Buildings & Structures (0.8%) made a small positive contribution in 2021, as has been the trend in previous years.
4 It is important to note that Transport Assets and Intangible Assets have been combined for 2015 and subsequent years to protect the confidentiality of data providers.
| Description | Sector | Subsector |
|---|---|---|
| Domestic Sector | 4.58 | 0 |
| Administrative & Support Service Activities (N) | 0 | 1.62 |
| Professional, Scientific & Technical Activities (M) | 0 | 0.99 |
| Manufacturing - Domestic | 0 | 0.54 |
| Wholesale & Retail (G) | 0 | 0.51numeric(0) |
| Financial & Insurance Activities (K) | 0 | 0.47 |
| Real Estate Activities (L) | 0 | 0.19 |
| Construction (F) | 0 | 0.09 |
| Human Health & Social Work (Q) | 0 | 0.05 |
| Transportation & Storage (H) | 0 | 0.05 |
| Electricity, Gas & Steam (D) | 0 | 0.03 |
| Arts, Entertainment & Recreation (R) | 0 | 0.03 |
| Agriculture, Forestry & Fishing (A) | 0 | 0.02 |
| Water Supply, Sewerage & Waste Management (E) | 0 | 0.02 |
| Accommodation & Food Service Activities (I) | 0 | 0.02 |
| Public Administration & Defence (O) | 0 | 0.01 |
| Activities of Households as Employers (T) | 0 | 0 |
| Other Service Activities (S) | 0 | -0.01 |
| Education (P) | 0 | -0.01 |
| Mining & Quarrying (B) | 0 | -0.05 |
Get the data: PxStat PIA15
Capital services in the Domestic economy grew steadily over the period 2011-2021, with an average growth rate of 4.6% per year. This was mainly explained by the contributions of Admin & Support Services (1.6%), which was largely attributable to aircraft-leasing assets and Professional & Technical Activities (1%). Most other sectors, such as Wholesale & Retail (0.5%), Financial & Insurance activities (0.5%) and Construction (0.1%) made a relatively small but positive average contribution to capital services growth over the period.
Get the data: PxStat PIA15
Figure 9.8 compares sectors in the economy5 in terms of their levels of capital assets (X-axis), hours worked (Y-axis) and labour productivity (size of bubbles) in 2021. The graph is presented to highlight that the most productive sectors in the Irish economy are those that are highly capital-intensive. While ICT (J) and Manufacturing – Foreign (C_F) were the most productive sectors in 2021, they were also among the most capital intensive. Admin & Support Services (N) appeared more similar to the foreign sectors rather than the domestic sectors due to the significant level of aircraft-leasing assets in the sector. The domestic sectors had far lower levels of capital assets than the foreign sectors, with far lower capital intensity due to their high levels of hours worked.
5 Real Estate is included separately from other domestic sectors for presentational purposes.
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