Output in an economy is the result of the combined contributions of both labour and capital. The labour share is the proportion of Gross Value Added (GVA) attributed to labour (in the form of wages, social benefits and self-employed income) with the remainder being attributed to capital (as profits). An increasing labour share is associated with an increase in returns to labour i.e. higher wages, more entrants into the labour force or decreasing returns to capital. On the other hand, a decreasing labour share implies that workers are receiving relatively lower compensation for their output which could also be explained by increases in profits.
The Irish labour share has been heavily influenced by the activities of foreign-owned multinational enterprises (MNEs) in the economy on account of the high concentration of intangible capital assets in these companies. As a result of the rapid growth of the Foreign sector, particularly since 2015, Ireland has had a very low labour share when compared to many EU countries.
Figure 5.1 compares the labour share for the total economy with that for the Foreign and Domestic sectors. In 2025, the labour share for the total economy stood at 31.7%. In 2025, the labour share continued to be significantly larger in the Domestic sector (57.2%) than the Foreign-dominated sector (9.3%).
| Timeperiod | Domestic Sector | Foreign Sector | Aggregate NACE Activities A - T |
|---|---|---|---|
| 2015 | 56.6 | 9.8 | 35 |
| 2016 | 58.8 | 10.7 | 37.1 |
| 2017 | 57.5 | 10.2 | 35.7 |
| 2018 | 56.6 | 10 | 34.3 |
| 2019 | 57.7 | 9.9 | 34 |
| 2020 | 56.9 | 9.4 | 31.8 |
| 2021 | 55 | 8.8 | 29.8 |
| 2022 | 55.2 | 8.2 | 28.9 |
| 2023 | 53.9 | 10.2 | 31.9 |
| 2024 | 56 | 9.9 | 32.3 |
| 2025 | 57.2 | 9.3 | 31.7 |
Get the data: PxStat PIA19
A comparison of the labour share across a few key sectors in the Irish economy is shown in Figure 5.2. The labour share for Foreign Manufacturing stood at 7.1% in 2025, compared to 42.5% for Domestic Manufacturing. The Information and Communication sector labour share fell to 12.8% in 2025, continuing a general downward trend from 2016, when the labour share was 26.7%.
| Timeperiod | Domestic Manufacturing (NACE 10-17,19,22-25,28-30,33) | Foreign Manufacturing (NACE 18,20,21,26,27,31,32) | Construction (F) | Wholesale and Retail Trade (G) | Transportation and Storage (H) | Accommodation & Food Service Activities (I) | Information and communication (J) | Financial and insurance activities (K) |
|---|---|---|---|---|---|---|---|---|
| 2015 | 35.2 | 6.4 | 74.3 | 57.4 | 58.2 | 84.1 | 25.9 | 45.5 |
| 2016 | 37.8 | 7 | 74.4 | 58.7 | 59.5 | 87.1 | 26.7 | 49.9 |
| 2017 | 38.3 | 6.6 | 66.5 | 57 | 59.6 | 81.8 | 23.1 | 49.1 |
| 2018 | 39 | 6.6 | 67.5 | 54.4 | 69.6 | 81.4 | 20.5 | 49.1 |
| 2019 | 43 | 6.9 | 67 | 55.9 | 67.9 | 83.3 | 17.8 | 52.3 |
| 2020 | 40.6 | 6.4 | 67.7 | 50 | 100 | 87.8 | 16.1 | 60.7 |
| 2021 | 42 | 5.7 | 67.3 | 49.6 | 83 | 74.8 | 15 | 48.4 |
| 2022 | 40.1 | 5 | 67.8 | 50 | 62.7 | 75.8 | 15.2 | 57.1 |
| 2023 | 39.6 | 7.4 | 66.5 | 50 | 59 | 76.6 | 14.8 | 48.3 |
| 2024 | 39.4 | 7.5 | 69.5 | 54.5 | 63.9 | 81.3 | 14 | 49.5 |
| 2025 | 42.5 | 7.1 | 68.8 | 55.2 | 59.7 | 82 | 12.8 | 55.1 |
Get the data: PxStat PIA19
Figure 5.3 shows the labour share across sectors in 2025 and how this compares to the total economy result of 31.7%. The Activities of Households as Employers and Education sectors reported the highest labour shares in 2025 at 100.0% and 95.3%, respectively. These sectors rely heavily on labour e.g., teachers. Other Services1, Human Health and Social Work, Accommodation & Food Services, and Public Administration & Defence all reported labour shares above 80% in 2025. These are typically labour-intensive industries, with more labour required than capital to carry out daily tasks. The scope for automation through the substitution of technology for labour is more limited in these sectors.
Looking at the capital-intensive sectors, Real Estate had the lowest labour share of 4.9% in 2025, substantially below the Total economy result of 31.7%. This reflects the significant contribution of imputed rents to this sector's GVA. Foreign Dominated Manufacturing saw a labour share of 7.1%, while the Information & Communication sector came in at 12.8% in 2025. These sectors are all capital-intensive sectors, with automation and improvements in technology driving them towards a higher use of capital rather than labour.
1The Other Services sector includes activities such as those of trade unions, religious and political organisations, as well as the repair of certain household goods.
| Description | GVA Labour Share |
|---|---|
| Real estate activities (L) | 4.9 |
| Foreign Manufacturing (NACE 18,20,21,26,27,31,32) | 7.1 |
| Information and communication (J) | 12.8 |
| Administrative and Support Service Activities (N) | 26.3 |
| Electricity, Gas, Steam and air conditioning supply (D) | 31.5 |
| Aggregate NACE Activities A - T | 31.7 |
| Mining and Quarrying (B) | 32 |
| Domestic Manufacturing (NACE 10-17,19,22-25,28-30,33) | 42.5 |
| Water Supply, Sewerage & Waste Management (E) | 49.6 |
| Professional, Scientific and Technical Activities (M) | 54.7 |
| Financial and insurance activities (K) | 55.1 |
| Wholesale and Retail Trade (G) | 55.2 |
| Domestic Sector | 57.2 |
| Transportation and Storage (H) | 59.7 |
| Arts, Entertainment and Recreation (R) | 61.5 |
| Construction (F) | 68.8 |
| Agriculture, Forestry and Fishing (A) | 69.6 |
| Public Administration and Defence (O) | 80.3 |
| Accommodation & Food Service Activities (I) | 82 |
| Human Health and Social Work Activities (Q) | 85.4 |
| Other service activities (S) | 92.5 |
| Education (P) | 95.3 |
| Activities of Households as Employers (T) | 100 |
Get the data: PxStat PIA19
Figure 5.4 shows that there were substantial changes in both labour compensation (wages) and capital compensation (profits) in 2025. Labour compensation is the proportion of GVA that is earned by labour, through wages, social benefits and self-employed income while capital compensation is the value of profits earned by companies.
Labour compensation rose in all sectors in 2025, with strongest growth rates seen in Water Supply, Sewerage & Waste Management (15.4%) and Agriculture, Forestry & Fishing (14.7%). The aggregate growth rates in labour compensation for the Total economy, Domestic sector and Foreign sector were relatively similar in 2025, at 4.9%, 5.1%, and 3.7%, respectively.
Growth rates in capital compensation varied across sectors in 2025. Agriculture, Forestry & Fishing reported the largest growth in capital compensation in 2025 at 42.6%. Other sectors that experienced large growth in capital compensation include: Transportation & Storage (23.2%), Mining & Quarrying (19.3%) and Information & Communication (13.8%). Financial & Insurance Activities (-17.2%), Domestic Manufacturing (-9.6%) and Professional, Scientific & Technical Activities (-4.8%) all experienced falls in capital compensation in 2025.
| Description | Capital Compensation Growth | Labour Compensation Growth |
|---|---|---|
| Wholesale and Retail Trade (G) | -0.65 | 2.24 |
| Accommodation & Food Service Activities (I) | -1.87 | 2.79 |
| Information and communication (J) | 13.82 | 2.96 |
| Public Administration and Defence (O) | 2.52 | 3.03 |
| Mining and Quarrying (B) | 19.28 | 3.07 |
| Domestic Manufacturing (NACE 10-17,19,22-25,28-30,33) | -9.6 | 3.19 |
| Real estate activities (L) | 5.2 | 3.21 |
| Professional, Scientific and Technical Activities (M) | -4.79 | 3.32 |
| Arts, Entertainment and Recreation (R) | 0.82 | 3.51 |
| Foreign Sector | 11.19 | 3.73 |
| Foreign Manufacturing (NACE 18,20,21,26,27,31,32) | 8.92 | 3.91 |
| Aggregate NACE Activities A - T | 7.83 | 4.86 |
| Other service activities (S) | -2 | 4.91 |
| Domestic Sector | 0.15 | 5.07 |
| Financial and insurance activities (K) | -17.23 | 5.2 |
| Construction (F) | 8.93 | 5.47 |
| Transportation and Storage (H) | 23.22 | 5.69 |
| Education (P) | 4.52 | 5.75 |
| Administrative and Support Service Activities (N) | 11.76 | 6.7 |
| Electricity, Gas, Steam and air conditioning supply (D) | 4.43 | 7.72 |
| Human Health and Social Work Activities (Q) | -2.82 | 7.85 |
| Agriculture, Forestry and Fishing (A) | 42.64 | 14.69 |
| Water Supply, Sewerage & Waste Management (E) | 3.02 | 15.44 |
Get the data: PxStat PIA19
Figure 5.5 compares the labour share for Ireland to the EU average for a range of sectors for the year 2024, where the labour share for European countries has been calculated as the share of wages over GVA2. Ireland’s labour share in 2024 (32.3%) was below the EU average of 53.0%. Ireland had a labour share above the EU average for several domestic sectors such as Education, Other Service Activities, and Human Health & Social Work Activities. Many of the sectors considered to be largely capital intensive in Ireland such as Manufacturing, Information & Communication and Administration & Support Service Activities reported labour shares far below the EU average. This is mainly explained by the onshoring of IPP and aircraft leasing activities.
2 For European Countries (and the EU average) an approximation of the labour share is estimated as COE / GVA in current prices. This does not take account of the adjustment for Mixed Income and Net Taxes and so likely understates the labour share for these countries. European comparisons use 2024 data due to the unavailability of the latest results for European counterparts.
| Description | EU Average | Ireland | Ireland - Domestic Sector | Ireland - Foreign Sector |
|---|---|---|---|---|
| Real estate activities (L) | 5.03576597560237 | 5 | 0 | 0 |
| Manufacturing (C) | 54.4471054798668 | 11.7 | 39.4 | 7.5 |
| Information and communication (J) | 54.0640575384594 | 14 | 0 | 0 |
| Administrative and Support Service Activities (N) | 59.3504077725223 | 27.3 | 0 | 0 |
| Electricity, Gas, Steam and air conditioning supply (D) | 25.0709364728875 | 30.8 | 0 | 0 |
| Total Economy | 53.0400402556286 | 32.3 | 56 | 9.9 |
| Mining and Quarrying (B) | 40.50226015065 | 35.6 | 0 | 0 |
| Water Supply, Sewerage & Waste Management (E) | 49.8795430004104 | 46.5 | 0 | 0 |
| Financial and insurance activities (K) | 47.1581877236819 | 49.5 | 0 | 0 |
| Professional, Scientific and Technical Activities (M) | 58.9885692188281 | 52.7 | 0 | 0 |
| Wholesale and Retail Trade (G) | 55.6268980111694 | 54.5 | 0 | 0 |
| Arts, Entertainment and Recreation (R) | 57.8353478359102 | 60.9 | 0 | 0 |
| Transportation and Storage (H) | 57.0931159410227 | 63.9 | 0 | 0 |
| Construction (F) | 54.2400293766754 | 69.5 | 0 | 0 |
| Agriculture, Forestry and Fishing (A) | 24.4688574112239 | 75.1 | 0 | 0 |
| Public Administration and Defence (O) | 74.7857608327935 | 80.2 | 0 | 0 |
| Accommodation & Food Service Activities (I) | 54.8233293916667 | 81.3 | 0 | 0 |
| Human Health and Social Work Activities (Q) | 77.7908368984076 | 84 | 0 | 0 |
| Other service activities (S) | 60.5744823739656 | 92 | 0 | 0 |
| Education (P) | 83.0640649394979 | 95.3 | 0 | 0 |
| Activities of Households as Employers (T) | 102.254950683909 | 100 | 0 | 0 |
Get the data: PxStat PIA19 (Irish Data) and Eurostat (Gross Value Added and Compensation of Employees)
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