Productivity in Ireland 2024 - 2025

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. 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. The chapter also includes international comparisons for these measures to provide context to the results presented. 

Figure 7.1 shows capital assets per employee for the total economy and the Foreign and Domestic sectors for 2015-2025. Changes in capital assets per employee indicate changes in the ratio of tangible and intangible 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 stood at €486,000 in 2025, a decrease of 1.0% compared to 2024 and the lowest level since 2014. This was the fifth consecutive year during which capital assets per employee declined in Ireland, reflecting the economy becoming less capital intensive relative to employment since 2020.

Capital assets per employee were far higher for the Foreign sector (€1.4m per employee) than for the Domestic sector (€353,500 per employee)¹ in 2025. The Foreign sector saw capital assets per person fall slightly by 0.3% in 2025, while Domestic sector remained relatively flat. 

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 2025 due to level of additions to the capital stock falling short of the level of depreciation.

¹ Capital assets per employee for the Domestic Market sector was €131,500 per employee in 2025.

² In National Accounts, depreciation is termed as Consumption of Fixed Capital (CFC).

Figure 7.2 presents a comparison of capital assets per employee for a range of sectors in Ireland for 2025. The sectors which had the highest levels were the Administrative & Support Services Activities³ sector and Water Supply, Sewerage & Waste Management, both of which had €1.4m of capital assets per employee. Construction and Other Service Activities saw the lowest levels of capital assets per employee in Ireland, at €27,000, and €12,600, respectively. 

³Administrative & Support Services captures aircraft leasing activities.

Figure 7.3 illustrates growth in capital assets per employee by sector for 2025. Capital assets per employee grew most strongly in Mining & Quarrying (23.4%), Other Service Activities (8.6%), and Electricity, Gas, Steam & Air Conditioning Supply (7.3%). The largest fall in capital assets per employee was observed in Financial & Insurance Activities (-6.6%). The fall for Manufacturing (-5.5%) was driven by the foreign sector, which saw capital assets per employee decrease by 5.2%.

In order to give an insight into longer term growth trends, Figure 7.4 illustrates average growth rates in capital assets per employee across the Irish economy for the period 2015-2025. Ireland’s level of capital assets per employee for the total economy declined on average by 1.3% per year over the period 2015-2025. This was driven largely by negative average growth in the Foreign sector of 4.6%, while capital assets per employee fell on average by 1.1% per year for the Domestic sector.

Capital assets per employee grew fastest over the period for Domestic Manufacturing (8.0%), followed by Information & Communication (7.8%). Several domestic sectors also saw negative average growth rates in capital assets per employee over the period, such as Electricity, Gas, Steam & Air Conditioning Supply (7.3%) and Professional, Scientific, & Technical Activities (-7.1%).

A comparison of capital assets per employee for Ireland and other EU countries in 2024 is shown in Figure 7.5. Ireland had the highest level of capital assets per employee (€491,100 per employee) in 2024. When calculated separately, Ireland's Foreign sector saw a significantly higher level of capital assets per employee compared to other EU countries at €1.4m. In contrast, Ireland's domestic sector reported capital assets per employee at €353,700. 

Capital services are the flow of productive services from capital assets rather than the level of the assets themselves. Thus, they are different to capital assets, which is a stock measure. They are somewhat analogous to hours worked in that hours worked are the flow of productive services from employees.

Figure 7.6 shows that capital services for the total economy grew by 5.6% to a value of €383.4bn in 2025. 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.

Figure 7.7 presents year-on-year growth rates in capital services for Ireland's Total economy, Foreign sector and Domestic sector for the period 2015-2025. Here, the large inflows of intellectual property in 2015 are reflected in the fast growth in capital services observed during that year. This was followed by a drop of 2.9% in 2016. Since then, annual growth rates in capital services for the Total economy had been positive up to and including 2022. In 2023, capital services decreased for the first time since 2016, falling by 6.8% for the Total economy. In 2024 and 2025, capital services for the Total Economy grew by 7.7% and 5.6%, respectively.