Productivity in Ireland 2024 - 2025

In this chapter, Labour Productivity is estimated separately for foreign-owned and domestically-owned companies. This approach, referred to as the Detailed Ownership Approach, is experimental and remains under continuous development.

The Detailed Ownership Approach differs from the approach used in all other chapters of this publication, as well as in the Annual National Accounts publication, which is known as the Dominance Approach. Under the Dominance Approach, sub-sectors are allocated to the Foreign Dominated sector where, on average, more than 85% of turnover is generated by foreign entities. In contrast, the Detailed Ownership Approach uses estimation techniques and micro-level data to estimate labour productivity among foreign-owned and Irish-owned entities within sectors separately. The resulting classifications are called Foreign Ownership and Domestic Ownership. Further details can be found in the Background Notes. 

While the Dominance Approach does not remove all foreign activity from the Domestic classification, this allows international comparisons with Total Economy statistics from other countries which are less affected by globalisation than Ireland. In contrast, the results presented in this chapter aim to strip all foreign activity from the domestic results. For this reason, they are not internationally comparable, and are provided in order to give additional insight into the Irish economy.

The use of the Detailed Ownership Approach results in less GVA and fewer labour hours being allocated to the domestic component of the economy, while more GVA and labour hours are allocated to the foreign component, compared with the Dominance Approach. Consequently, labour productivity is consistently lower for the Foreign Ownership estimate than for the Foreign Dominated sector. Similarly, labour productivity for the Domestic Ownership estimate is lower than that recorded for the Domestic sector under the Dominance approach.

Figure 4.1 compares labour productivity statistics under these two alternative approaches to splitting the economy into foreign and domestic components. For the domestic component, labour productivity in the Domestic sector was €65.8 per hour in 2025, compared with €59.5 per hour for firms classified as having Domestic Ownership. For the foreign component, labour productivity in the Foreign Dominated sector was estimated at €507.3 per hour in 2025, while it was approximately 36% lower at €323.2 per hour for firms with Foreign Ownership.

Figure 4.2 presents labour productivity for the Total Economy, Domestic Dominated Sector, Foreign Dominated Sector, Domestic Ownership and Foreign Ownership in from 2019 to 2025. Across the seven year period, labour productivity among foreign owned companies was on average approximately 39% lower than labour productivity for the foreign dominated sector. Looking at the domestic results, labour productivity among domestic owned companies showed small differences with labour productivity in the domestic sector in 2019 and 2020. From 2021 onwards, the gap grew to be approximately 9-12%. 

Figure 4.3 shows estimates of labour productivity for foreign owned and domestic owned companies by industry in 2025. For domestic owned companies, labour productivity was highest in Real Estate excluding imputed rent at €509.4 per hour, and Financial and Insurance Activities, at €115.2 per hour. For foreign owned companies, labour productivity was highest in Information and Communication at €625.2 per hour, Manufacturing at €577.4 per hour and Administration and Support Service Activities at €409.8 per hour.

Both Information and Communication and Manufacturing showed the largest within-sector differences in labour productivity between foreign owned and domestic owned companies. In Information and Communication, foreign owned companies exhibited labour productivity over 15 times larger than their domestically owned counterparts. In Manufacturing, labour productivity among foreign owned companies was over thirteen times that of domestically owned companies in the sector.

Figure 4.4 shows labour productivity estimated for Irish owned and foreign owned companies within the Manufacturing sector from 2019 to 2025. Labour productivity for domestic owned manufacturing companies grew in 2023 to a value of €44.2 per hour, up from €37.1 per hour in 2022, and has remained relatively stable up to 2025. Labour productivity for foreign owned Manufacturing companies grew to reach €650.8 per hour in 2022, the highest value observed over the seven-year period. Labour productivity for foreign owned manufacturing companies dropped to €522.2 per hour in 2023, before growing steadily to €577.4 per hour by 2025.

Labour Productivity for foreign and domestically owned companies is further broken down by company size in Figure 4.5. As discussed in the Background Notes, where a company is part of a group structure, the size classification reflects the number of employees in the group in Ireland as a whole.

These results show that large foreign-owned companies drive the Manufacturing sector's overall labour productivity value. The labour productivity of large foreign-owned manufacturing companies is estimated to stand at €673.2 per hour in 2025, while Irish owned large manufacturing companies saw labour productivity at €90.1 per hour.

Irish owned medium-sized manufacturing companies exhibited labour productivity at €35.8 per hour in 2025, lower than their foreign owned counterparts whose labour productivity stood at €135.2 per hour.

Foreign owned small manufacturing companies saw higher labour productivity, at €98.90 per hour, compared to Irish owned small, medium and large manufacturing companies.

Figure 4.6 presents estimates of labour productivity for foreign owned and Irish owned manufacturing companies by company size from 2019 to 2025. These results show that labour productivity among large foreign owned manufacturing companies reached a high of €767.2 per hour in 2022, after a steady climb from a value of €458.2 in 2019.

Medium foreign owned manufacturing companies were estimated to have labour productivity which was at least twice of that of medium Irish owned manufacturing companies across the period 2019-2025, with this gap generally widening over time. 

Labour productivity for foreign owned small manufacturing companies was consistently higher than domestically owned counterparts from 2019 to 2025. Labour productivity for foreign owned small manufacturing companies initially grew from €76.6 per hour in 2019 to €98.9 in 2021, before fluctuating somewhat in subsequent years, remaining at €98.9 in 2025. Labour productivity among Irish owned small manufacturing companies remained relatively steady during the 2019-2025 period, with the highest value estimated in 2023 (€31.8 per hour). 

In Figures 4.7 to 4.11, labour productivity estimates among domestic owned and foreign owned companies from 2019 to 2025 are shown for a selection of sectors. Breakdowns for additional sectors can be found in PxStat table PIA21. 

Figure 4.7 presents labour productivity estimates for Irish owned and foreign owned companies within the Information and Communication sector from 2019 to 2025. In this sector, labour productivity for Irish owned companies exhibited an overall downward trend from 2020 (€56.1 per hour) to 2025 (€39.9 per hour). Foreign owned companies' labour productivity rose steadily from €324.8 per hour in 2019, to a high of €625.2 in 2025. 

Labour productivity estimates for Irish owned and foreign owned companies in the Administration and Support Services sector over the period 2019 to 2025 are shown in Figure 4.8. Irish owned companies in this sector saw overall growth in labour productivity, particularly from 2022 (€62.0 per hour) to 2025 (81.9 per hour). Foreign owned Administration and Support Services companies saw declining labour productivity after 2020, reaching a low of €264.0 in 2022. From 2023 to 2025, foreign owned companies in the sector grew consistently year-on-year, reaching €409.8 in 2025. 

Figure 4.9 presents labour productivity estimates for Irish owned and foreign owned companies in Wholesale and Retail Trade over the period 2019 to 2025. In 2025, labour productivity for foreign owned companies in Wholesale and Retail Trade was estimated at €115.2 per hour, compared to €50.8 per hour for domestic owned companies in the sector. Across the period 2019-2025, labour productivity among foreign owned companies was estimated at over double the labour productivity of domestic owned companies within the Wholesale and Retail Trade sector. 

Labour productivity estimates for Irish owned and foreign owned Construction for 2019 to 2025 are shown in Figure 4.10. Irish owned Construction companies saw a decline in Labour Productivity of 22.5% in 2022, falling to €41.7 per hour from €52.2 per hour in 2021. Labour Productivity among Irish owned Construction companies remained relatively flat in the subsequent years, estimated at €42.6 per hour in 2025. For foreign owned construction companies, labour productivity declined consistently from 2019 (€69.3 per hour) to 2022 (€61.5 per hour), before rising over the subsequent years to a high of €80.2 per hour in 2025. 

Figure 4.11 shows labour productivity estimates for Irish owned and foreign owned companies within Accommodation and Food Services from 2019 to 2025. Labour productivity initially declined strongly for both foreign owned and Irish owned companies, reaching lows of €29.8 and €27.0 per hour respectively in 2021. Strong growth was observed for both foreign owned companies (23.0%) and Irish owned companies (17.3%) in the hospitality sector in 2022, with more modest year-on-year fluctuations in the following years. In 2025, labour productivity for Foreign owned companies was estimated at €39.0 per hour, while it was estimated at €32.0 per hour for domestically owned companies within the sector.