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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 note.
Labour productivity is a key indicator for the Irish economy and it is the main measure of the efficiency of the labour force. Labour productivity is measured as output per hour worked, where output is measured as Gross Value Added (GVA). If a particular sector has higher labour productivity than another sector, it implies that the sector may be using its labour force more efficiently to produce output.
Despite the impact of COVID-19, labour productivity in Ireland has seen consistent improvements over the last number of years, however it will be shown in this chapter that the main sources of that increased productivity are almost entirely related to globalisation effects. There is a significant disparity between the hyper-productive Foreign sector and the less productive Domestic sector1.
This is due to the capital-intensive nature of activities by foreign-owned multinational enterprises (MNEs), which also impacts labour productivity at the total economy level. When comparing sectors in the Irish economy to their European equivalents, Ireland stands out as highly productive for foreign-dominated sectors but is only slightly above average for many of its domestic sectors. The productivity indicators for the Domestic sector are given prominence in this report on account of their importance for Irish policy makers.
1 The Foreign sector refers to all economic sectors where turnover from foreign multinational enterprises exceeds 85% of total sector turnover. These sectors are only related to the Manufacturing and Information & Communications sectors. For more information, please see the Background Notes.
| Timeperiod | Domestic Sector | Foreign Sector | Total Economy |
|---|---|---|---|
| 2011 | 51.4 | 163.1 | 62.8 |
| 2012 | 50.4 | 159.3 | 61.8 |
| 2013 | 49.5 | 153 | 60.2 |
| 2014 | 50.9 | 165.3 | 62.8 |
| 2015 | 52.4 | 277.5 | 75.4 |
| 2016 | 50.9 | 263.1 | 72.7 |
| 2017 | 51.6 | 257.1 | 74.6 |
| 2018 | 53.2 | 272.8 | 79.3 |
| 2019 | 53.9 | 281.8 | 81.2 |
| 2020 | 56.7 | 340.6 | 96.5 |
| 2021 | 56.1 | 370 | 102 |
Get the data: PxStat PIA15
Figure 3.1 illustrates labour productivity for the Irish economy over the period 2011-2021 and highlights the significant disparity between the Foreign and Domestic sides of the economy. Labour productivity for the total economy was €102/hour in 2021, an annual increase of 5.5%. This was twice the level of labour productivity for the Domestic sector at €56.1/hour, which fell slightly by 1%. In stark contrast to this, labour productivity for the Foreign sector was €370/hour, which grew by 8.3%, due to the performance of the highly productive Manufacturing – Foreign and Information & Communications (ICT) sectors.
| Timeperiod | Domestic Market Sector | Non-Market Sector | Domestic Sector | Total Economy |
|---|---|---|---|---|
| 2011 | 45.4 | 70.1 | 51.4 | 62.8 |
| 2012 | 44.1 | 69.6 | 50.4 | 61.8 |
| 2013 | 43.3 | 69 | 49.5 | 60.2 |
| 2014 | 45.3 | 68 | 50.9 | 62.8 |
| 2015 | 47 | 69.2 | 52.4 | 75.4 |
| 2016 | 45.5 | 68 | 50.9 | 72.7 |
| 2017 | 46.7 | 66.6 | 51.6 | 74.6 |
| 2018 | 49.2 | 64.7 | 53.2 | 79.3 |
| 2019 | 50.5 | 63.4 | 53.9 | 81.2 |
| 2020 | 53.7 | 64.4 | 56.7 | 96.5 |
| 2021 | 53.7 | 61.9 | 56.1 | 102 |
Get the data: PxStat PIA15
Figure 3.2 illustrates labour productivity over the period 2011-2021 for both the total economy and the Domestic sector. Results for the domestic Market and Non-Market2 sectors are also provided. The non-market sector consists of Real Estate and Public Admin, Education and Health, which all have significant influence on the Domestic sector.
In particular, Real Estate, which had labour productivity of €1,045.1/hour in 2021, accounted for 12.7% of GVA for the Domestic sector, but only 0.7% of hours worked. As output in Real Estate is primarily determined by imputed rents attributable to owner occupiers of dwellings, it is not directly comparable to the output produced in other sectors. To assist policymakers and analysts the Domestic Market sector has been included separately in the PxStat tables for each indicator shown in this publication.
2 The Non-Market sector comprises NACE A21 sectors L (Real Estate), O (Human Health), P (Education) and Q (Public Administration). The Domestic market sector comprises all remaining sectors in the economy, with the exception of the foreign-dominated J (Information and Communications) and Manufacturing - Foreign (NACE 18, 20, 21, 26, 27, 31 and 32).
| Description | EU Countries | EU Average | Ireland |
|---|---|---|---|
| Portugal | 22.6478488931026 | 0 | 0 |
| Czechia | 27.4500829788356 | 0 | 0 |
| Finland | 53.5789032092666 | 0 | 0 |
| Sweden | 56.6896287126418 | 0 | 0 |
| Netherlands | 60.39322599199 | 0 | 0 |
| Ireland - Domestic Sector | 0 | 0 | 61.9 |
| Belgium | 63.3415108955078 | 0 | 0 |
| Denmark | 78.545628172316 | 0 | 0 |
| Ireland | 0 | 0 | 107.1 |
| Ireland - Foreign Sector | 0 | 0 | 390.3 |
| EU Average | 0 | NA | 0 |
| Hungary | NA | 0 | 0 |
| Luxembourg | NA | 0 | 0 |
Get the data: PxStat PIA15 (Irish Data) and Eurostat (Gross Value Added and Hours Worked)
Figure 3.3 compares labour productivity3 in the Irish economy (€102/hour) to that of several similarly-sized EU economies, as well as average EU labour productivity in 2021. Labour productivity for the Irish Domestic sector (€56.1/hour) was above the EU average (€38.2/hour) with similar results for Sweden, Belgium and the Netherlands.
3. The labour productivity data used for comparison was calculated using data from Eurostat tables Gross Value Added and Hours Worked. This data does not account for differences in the measurement of hours worked across countries, and so is provided for illustrative purposes rather than a precise comparison of labour productivity across the EU. A more comparable dataset is found in this Eurostat table, although this only provides data in the form of indices which only facilitate growth comparisons rather than the level comparisons shown.
| Description | Belgium | Ireland | Ireland - Domestic Sector | Ireland - Foreign Sector |
|---|---|---|---|---|
| Agriculture, Forestry and Fishing (A) | 26.4445323314218 | 27.3 | 0 | 0 |
| Accommodation & Food Service Activities (I) | 35.8763367911177 | 31 | 0 | 0 |
| Construction (F) | 53.3044294567633 | 38 | 0 | 0 |
| Transportation and Storage (H) | 64.8141444683403 | 45 | 0 | 0 |
| Mining and Quarrying (B) | 69.9916411256617 | 55.8 | 0 | 0 |
| Wholesale and Retail Trade (G) | 69.1364527355886 | 59.6 | 0 | 0 |
| Water Supply, Sewerage & Waste Management (E) | 78.5263385069151 | 82.6 | 0 | 0 |
| Financial and insurance activities (K) | 185.104279924879 | 90.8 | 0 | 0 |
| Professional, Scientific and Technical Activities (M) | 35.3767162939629 | 90.8 | 0 | 0 |
| Total Economy | 63.3415108955078 | 107.1 | 61.9 | 390.3 |
| Administrative and Support Service Activities (N) | 37.2623865104408 | 145.4 | 0 | 0 |
| Electricity, Gas, Steam and air conditioning supply (D) | 362.06806709005 | 224.8 | 0 | 0 |
| Manufacturing (C) | 85.9240028382057 | 284 | 89.5 | 441.4 |
| Information and communication (J) | 95.6952204128909 | 294.9 | 0 | 0 |
| Real estate activities (L) | 1125.54288569871 | 1510.4 | 0 | 0 |
Get the data: PxStat PIA15 (Irish Data) and Eurostat (Gross Value Added and Hours Worked)
| Description | Finland | Ireland | Ireland - Domestic Sector | Ireland - Foreign Sector |
|---|---|---|---|---|
| Manufacturing (C) | 0.410227049367055 | -24.4 | 15 | -28.9 |
| Wholesale and Retail Trade (G) | 0.56716326994495 | -8.6 | 0 | 0 |
| Total Economy | -1.51301292690788 | -7.5 | 3.8 | -15.9 |
| Professional, Scientific and Technical Activities (M) | 0.0694945819243898 | -6.7 | 0 | 0 |
| Construction (F) | 0.379918847266054 | 0.6 | 0 | 0 |
| Administrative and Support Service Activities (N) | -1.49573683505623 | 3.6 | 0 | 0 |
| Information and communication (J) | 13.8179472715099 | 5 | 0 | 0 |
| Accommodation & Food Service Activities (I) | 1.81972691180203 | 6.7 | 0 | 0 |
| Transportation and Storage (H) | 0.406047021243681 | 8.7 | 0 | 0 |
| Mining and Quarrying (B) | 1.01544529490112 | 10.1 | 0 | 0 |
| Financial and insurance activities (K) | -0.979243529029929 | 10.9 | 0 | 0 |
| Agriculture, Forestry and Fishing (A) | -0.135713753655406 | 12.8 | 0 | 0 |
| Water Supply, Sewerage & Waste Management (E) | -0.846275331007818 | 21 | 0 | 0 |
| Real estate activities (L) | 0.105720887722476 | 27 | 0 | 0 |
| Electricity, Gas, Steam and air conditioning supply (D) | 0.0992391437943425 | 61.2 | 0 | 0 |
Get the data: PxStat PIA15 (Irish Data) and Eurostat (Gross Value Added and Hours Worked)
| Description | Finland | Ireland | Ireland - Domestic Sector | Ireland - Foreign Sector |
|---|---|---|---|---|
| Electricity, Gas, Steam and air conditioning supply (D) | 0.057493191274926 | -6.30909090909091 | 0 | 0 |
| Transportation and Storage (H) | 0.25695269605301 | -5.4 | 0 | 0 |
| Construction (F) | -0.931061541457023 | -2.93636363636364 | 0 | 0 |
| Financial and insurance activities (K) | 0.562677674101211 | -2.25454545454545 | 0 | 0 |
| Accommodation & Food Service Activities (I) | -0.186465762544607 | -1.64545454545455 | 0 | 0 |
| Water Supply, Sewerage & Waste Management (E) | -0.832899364475493 | -0.618181818181818 | 0 | 0 |
| Administrative and Support Service Activities (N) | 0.67435898569695 | 2.5 | 0 | 0 |
| Wholesale and Retail Trade (G) | -2.19702733101676 | 2.51818181818182 | 0 | 0 |
| Real estate activities (L) | 1.19126798824518 | 2.80909090909091 | 0 | 0 |
| Total Economy | 0.939449373264639 | 4.13636363636364 | 1.1 | 6.10909090909091 |
| Professional, Scientific and Technical Activities (M) | -0.568773316170322 | 5.76363636363636 | 0 | 0 |
| Mining and Quarrying (B) | -0.130405002535106 | 6.39090909090909 | 0 | 0 |
| Manufacturing (C) | -0.713176626208704 | 7.6 | 5.13636363636364 | 5.10909090909091 |
| Agriculture, Forestry and Fishing (A) | -2.9180130077515 | 8.77272727272727 | 0 | 0 |
| Information and communication (J) | 1.89466448600054 | 9.39090909090909 | 0 | 0 |
Get the data: PxStat PIA15 (Irish Data) and Eurostat (Gross Value Added and Hours Worked)
Get the data: PxStat PIA15 (Irish Data) and Eurostat (Gross Value Added and Hours Worked)
Labour productivity for Ireland’s total economy had an average annual increase of 4.7% per year over the period 2011-2021, the highest in the EU. Ireland’s Manufacturing (8.9% per year) and ICT (8.7% per year) sectors had the highest increase in labour productivity among the countries shown, well above the EU average.
The sectors of Transportation & Storage and Accommodation & Food were negatively impacted by the COVID-19 pandemic. The negative result for Financial & Insurance activities is explained by the downward trend in activity over the entire decade. These sectors all reported results well below the EU average.
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