Productivity in Ireland 2024 - 2025

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) in constant prices. 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, for example by utilising capital. 

As will be shown in this chapter, labour productivity had seen consistent improvements for a number of years until 2022 despite the impact of COVID-19. After remaining relatively flat in 2023 and 2024, labour productivity for the Total Economy grew to the highest level on record in 2025, driven by the Foreign dominated sector.

In Ireland, there is a significant disparity between the hyper-productive Foreign sector and the Domestic sector¹ both in terms of their respective levels of labour productivity and the trends they exhibit over time. 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. 

Figure 2.1 below illustrates labour productivity for the Irish economy over the period 2015-2025 and highlights the significant disparity between the Foreign and Domestic sides of the economy. Labour productivity for the Total Economy was €125.3 per hour in 2025, an annual increase of 6.1%. Labour productivity for the Domestic sector stood at €65.8 per hour, a decline of 0.8% relative to 2024. In contrast to this, labour productivity for the Foreign sector was €507.3 per hour, which constitutes annual growth of 14.2%.

¹ The Foreign sector refers to all economic sectors where turnover from foreign multinational enterprises exceeds 85% of the sector total on average. These sectors are related to the Manufacturing and Information & Communications sectors. In this release, the Renting and Leasing sector is also treated as foreign given the large amount of capital aircraft assets held in this sector. The Administrative and Support Service Activities is therefore split into a domestic and foreign part. For more information, please see the Background Notes.

Figure 2.3 presents labour productivity statistics for 2025, broken down by sector. The highest levels of labour productivity were observed in Foreign Dominated Manufacturing (€524.8 per hour), Information and Communication (€415.9 per hour), and Real Estate Activities Excluding Imputed Rent (€330.5 per hour). The lowest levels of labour productivity were observed in Agriculture, Forestry and Fishing (€22.5 per hour), Other Service Activities (€28.8 per hour) and Accommodation and Food Service Activities (€32.8 per hour). 

European Comparisons of Labour Productivity: 2024

In this section, Ireland's 2024 labour productivity results are compared with those of other European countries³. 

Figure 2.4 compares labour productivity in the Irish economy (€117.8 per hour) to that of several similarly-sized EU economies, as well as average EU labour productivity in 2024. Labour productivity for the Irish Domestic sector (€66.3 per hour) was above the EU average (€45.9 per hour). 

³The labour productivity data used for these comparisons were 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. Comparisons are made using 2024 data as opposed to 2025 data due to the unavailability of the latest results for EU counterparts.  

Figure 2.5 compares Irish labour productivity for 2024 to the EU Average for a range of sectors. Irish Labour Productivity for the Total economy was higher than the EU average across all sectors with the exception of Electricity, Gas, Steam and Air Conditioning Supply, and Mining and Quarrying, which tends to see volatile results due to the nature of its activities. For Information and Communication, Ireland's labour productivity (€345.5 per hour) was over five times the EU average (€67.8 hour). For the Manufacturing sector, both Foreign dominated labour productivity (€481.3 per hour) and Domestic labour productivity (€95.8 per hour) were above the EU average (€51.3 per hour). 

Figure 2.6 compares Irish Labour Productivity Growth in 2024 to the EU average for a range of sectors. While labour productivity for Ireland’s total economy rose by 1.8% in 2024, there were varying results across sectors.

Labour Productivity for Ireland's Manufacturing sector overall rose by 0.6% in 2024, while the sector saw a decrease of 1.0% on average across the European Union. This overall increase was driven by the Domestic manufacturing sector, which saw labour productivity rise by 8.2% in 2024. In contrast, labour productivity in Foreign-dominated manufacturing declined by 2.8%.

Figure 2.7 presents annual compound growth rates in Labour Productivity over the period 2014 to 2024 in Ireland for a range of sectors. These are compared to the EU average equivalent rate for each sector. Labour productivity for Ireland’s total economy had an average annual growth rate of 4.8% per year over the period 2014-2024, a rate which was nearly seven times the EU average of 0.7% per annum. Labour productivity for the domestic sector exhibited an average annual growth rate of 1.6% for this period, while the foreign dominated sector grew at a rate of 6.0% per year. 

The largest annual growth rates in Labour Productivity within Ireland in 2024 were seen in Information and Communication (10.2%), Manufacturing (9.1%), and Agriculture, Forestry & Fishing (7.4%). As well as being the fastest growing sectors in Ireland in terms of labour productivity, they also far exceeded EU average growth rates.