This publication is categorised as a Frontier Series Output. Particular care must be taken when interpreting the statistics in this release as it may use new methods which are under development and/or data sources which may be incomplete, for example, new administrative data sources.
Total Economy labour productivity (€127 per hour) increased by 6.8% in Q1 2025 compared with Q4 2024.
Labour productivity for the Domestic sector (€65.30 per hour) increased by 2% in Q1 2025 compared with Q4 2024, while labour productivity for the Foreign sector (€517.40 per hour) was up by 11%.
Total Economy multifactor productivity went up by 7% in Q1 2025 compared with Q4 2024.
Quarter-on-quarter multifactor productivity for the Domestic sector was up by 2.3%, while Foreign sector multifactor productivity grew by 10.6%.
In this release, the term Foreign sector refers to those sectors dominated by Foreign-Owned Multinational Enterprises (MNEs). These are sectors where Foreign-Owned MNE turnover on average exceeds 85% of the sector total. The term Domestic sector is used to refer to all other sectors not classified as Foreign.
It should be noted that the Foreign and Domestic classifications in this release also differ slightly from those used elsewhere in the CSO’s National Accounts. Rental & Leasing Services (NACE 77) is classified as Foreign in this release due to the concentration of foreign-owned capital in the sector.
All growth rates presented in this release are log growth rates for presentational purposes.
More information is available in the Background Notes.
Labour productivity is a key indicator for the Irish economy as 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. Therefore, changes in labour productivity for a sector can be explained by changes in GVA and changes in hours worked.
Labour productivity for the Total Economy (€127 per hour1) rose by 6.8% in the first quarter of 2025. Labour productivity was up in the Foreign sector (€517.40 per hour, up 11%) and in the Domestic sector (€65.30 per hour, up 2%) compared with Q4 2024. Figure 1.1 shows the evolution of productivity in the Total Economy as well as in the Domestic and Foreign sectors since Q1 2022.
1 All results presented in this release are seasonally adjusted unless otherwise stated.
| Timeperiod | Domestic Sector | Foreign Sector | Total Economy |
|---|---|---|---|
| 2022 - Q1 | 59.5 | 428.3 | 112.6 |
| 2022 - Q2 | 59.7 | 459.6 | 114.5 |
| 2022 - Q3 | 60.5 | 491.1 | 120 |
| 2022 - Q4 | 61.1 | 488.2 | 119.5 |
| 2023 - Q1 | 62.7 | 426.7 | 113.2 |
| 2023 - Q2 | 63.9 | 440.3 | 115.1 |
| 2023 - Q3 | 63.7 | 398.9 | 110 |
| 2023 - Q4 | 64.5 | 409.9 | 110.1 |
| 2024 - Q1 | 64.7 | 386.5 | 108.3 |
| 2024 - Q2 | 64.7 | 379 | 109.5 |
| 2024 - Q3 | 64.8 | 440.2 | 116.3 |
| 2024 - Q4 | 64 | 463.4 | 118.7 |
| 2025 - Q1 | 65.3 | 517.4 | 127 |
We can look at labour productivity individually in each of the subsector activities of the economy. Figure 1.2 shows the changes in labour productivity in the subsectors being analysed in this release. It shows how changes in GVA and hours worked make up these productivity changes. For example, the largest growth in labour productivity in Q1 2025 was in Foreign Manufacturing (+21%). This was made up of growth in GVA of 18.2% and a drop in hours worked of 2.8%. In contrast, a fall in productivity in Real Estate Activities of 16.6% was made up entirely of an increase in hours worked of 16.6%. Total Economy productivity was driven by a rise in GVA of 5.9% and a decrease in hours worked of 0.9%.
The relationship between total hours worked and output per hour is inverse: as hours worked rise, output per hour falls, and vice-versa. To reflect this, the sign of total hours worked is reversed in Figure 1.2.
| Description | Hours Worked (sign reversed) | Gross Value Added | Labour Productivity |
|---|---|---|---|
| Manufacturing - Foreign | 2.8 | 18.2 | 21 |
| Transportation & Storage (H) | 9 | 5.7 | 14.8 |
| Construction (F) | 3.8 | 7.6 | 11.4 |
| Professional, Scientific & Technical Activities (M) | 2.9 | 6 | 9 |
| Public Administration, Education & Health (O-Q) | 1.9 | 1.1 | 3 |
| Wholesale & Retail (G) | 1.8 | 1.1 | 2.9 |
| Accommodation & Food Service Activities (I) | -1.7 | 2.7 | 1 |
| Information & Communication (J) | 0 | 0.7 | 0.7 |
| Arts, Entertainment & Other Services (R-T) | -1.3 | -0.7 | -2 |
| Mining & Quarrying (B) | -0.1 | -2.4 | -2.5 |
| Energy & Water (D-E) | 8.1 | -11.6 | -3.5 |
| Manufacturing - Domestic | -1.3 | -4.3 | -5.6 |
| Agriculture, Forestry & Fishing (A) | -1.2 | -5.2 | -6.4 |
| Financial & Insurance Activities (K) | -8.8 | 0.5 | -8.4 |
| Administrative & Support Service Activities (N) | -5.2 | -3.9 | -9.1 |
| Real Estate Activities (L) | -16.6 | 0 | -16.6 |
| Domestic Sector | 0.8 | 1.2 | 2 |
| Foreign Sector | 1.1 | 9.9 | 11 |
| Total Economy | 0.9 | 5.9 | 6.8 |
Domestic labour productivity increased by 2% in Q1 2025, compared with the previous quarter. This was caused by a decrease in hours worked (-0.8%) and an increase in GVA (1.2%) in the quarter. Figure 1.3 shows labour productivity broken down into both GVA and hours worked in the period since Q1 2022.
Looking at the growth in Domestic GVA in Q1 2025, Professional, Scientific & Technical Activities (0.8%) and Construction (0.5%) made the largest positive contributions. Domestic Manufacturing (-0.4%) made the most significant negative contribution.
The main contributor to the increase in Domestic Hours worked include Financial & Insurance Activities (0.5%), while Public Administration, Education & Health (-0.6%) and Transportation & Storage (-0.5%) made the most significant negative contributions.
| Timeperiod | Labour Productivity | Hours Worked | Gross Value Added |
|---|---|---|---|
| 2022 - Q1 | -7.2 | 2.9 | -4.3 |
| 2022 - Q2 | 0.3 | 2.2 | 2.5 |
| 2022 - Q3 | 1.4 | -1.3 | 0.1 |
| 2022 - Q4 | 1 | 1.1 | 2.1 |
| 2023 - Q1 | 2.7 | 1.7 | 4.4 |
| 2023 - Q2 | 1.7 | -0.5 | 1.3 |
| 2023 - Q3 | -0.3 | 0 | -0.3 |
| 2023 - Q4 | 1.3 | -0.2 | 1 |
| 2024 - Q1 | 0.3 | 1.5 | 1.8 |
| 2024 - Q2 | 0.1 | -0.3 | -0.3 |
| 2024 - Q3 | 0.2 | 1.7 | 1.8 |
| 2024 - Q4 | -1.3 | 0.2 | -1.1 |
| 2025 - Q1 | 2 | -0.8 | 1.2 |
The growth/decline in Domestic Labour productivity can be broken down into the contributions of each of its subsectors2, as shown in Figure 1.4. The contribution of each subsector is determined by two factors: labour productivity growth for the individual subsector (Productivity Effect) and changes in the relative size of the subsector compared with the total Domestic sector (Composition Effect). Positive labour productivity growth for a subsector will always lead to a positive Productivity Effect, however the Composition Effect3 depends on how productive the subsector is compared with the overall Domestic sector. For example, if a low productivity subsector grows faster than the rest of the Domestic subsectors, it will account for a larger share and therefore reduce average labour productivity for the total Domestic sector.
The 2% quarter-on-quarter increase in Domestic labour productivity can be explained by a Productivity Effect of -0.2% and a Composition Effect of 2.2%. This means that changes in the composition of the sector (Composition Effect) had a larger impact than reductions in subsector productivity (Productivity Effect) on Domestic labour productivity growth for the quarter. Domestic Manufacturing (2.4%) and Professional, Scientific & Technical Activities (0.6%) made the largest positive contributions. Financial & Insurance Activities (-0.6%) and Wholesale & Retail (-0.4%) made the most significant negative contributions to Domestic labour productivity growth.
2 For confidentiality purposes, the contributions of Information & Communications – Domestic and Administrative & Support Services – Domestic have been combined in Figure 1.4.
3 Also called the Reallocation Effect.
| Description | Composition Effect | Productivity Effect | Contribution |
|---|---|---|---|
| Manufacturing - Domestic | 2.866 | -0.439 | 2.428 |
| Domestic Sector | 2.191 | -0.179 | 2.012 |
| Professional, Scientific & Technical Activities (M) | -0.536 | 1.089 | 0.553 |
| Construction (F) | -0.332 | 0.658 | 0.325 |
| Agriculture, Forestry & Fishing (A) | 0.364 | -0.145 | 0.219 |
| Energy & Water (D-E) | 0.236 | -0.094 | 0.143 |
| Transportation & Storage (H) | -0.476 | 0.585 | 0.109 |
| ICT and Administrative & Support Services - Domestic | 0.099 | -0.106 | -0.007 |
| Mining & Quarrying (B) | -0.007 | -0.008 | -0.015 |
| Public Administration, Education & Health (O-Q) | -0.691 | 0.602 | -0.089 |
| Accommodation & Food Service Activities (I) | -0.151 | 0.033 | -0.118 |
| Arts, Entertainment & Other Services (R-T) | -0.08 | -0.044 | -0.124 |
| Real Estate Activities (L) | 1.476 | -1.849 | -0.373 |
| Wholesale & Retail (G) | -0.812 | 0.381 | -0.431 |
| Financial & Insurance Activities (K) | 0.233 | -0.842 | -0.61 |
While changes in the level of labour in the economy are a crucial factor in explaining changes in efficiency in the economy, it is important to remember that overall productivity is not only dependent on labour. Capital, such as machinery, equipment, factories, and vehicles (tangible capital) and intellectual property (intangible capital) is the other key element of production in any economy.
Changes in the level of capital available to labour (capital deepening) has a considerable influence on output, as more capital investment increases the productive capacity of workers. Capital deepening is measured as the change in capital services per hour worked, where capital services are units of capital in the same way that hours worked are units of labour.
Aside from the level of labour and capital, overall productivity is also influenced by factors such as education, skills, organisational practices, and changes in technology among others, all of which have a significant influence on the quality of labour and capital. Multifactor productivity (MFP) is the measure of overall productivity in the economy, which attempts to capture all these features.
Figure 1.5 shows the contributions of labour, capital, and MFP growth to GVA quarter-on-quarter growth for the Domestic sector. GVA growth is explained by the contributions of labour and capital, where the contributions capture changes in both of these factors. MFP growth is calculated as the difference between GVA growth and the sum of the labour and capital contributions (i.e. a residual measure).
Domestic GVA grew by 1.2% in the first quarter of 2025, explained by a MFP increase of 2.3%, decreased labour contribution of -0.5%, and by a capital contribution decrease of -0.7%.
| Timeperiod | Labour Contribution | Capital Contribution | Multifactor Productivity | Gross Value Added |
|---|---|---|---|---|
| 2022 - Q1 | 1.6 | 0.6 | -6.5 | -4.3 |
| 2022 - Q2 | 1.2 | 1.3 | 0 | 2.5 |
| 2022 - Q3 | -0.7 | 0.6 | 0.2 | 0.1 |
| 2022 - Q4 | 0.6 | 0.2 | 1.3 | 2.1 |
| 2023 - Q1 | 0.9 | 0.9 | 2.6 | 4.4 |
| 2023 - Q2 | -0.3 | 1 | 0.5 | 1.3 |
| 2023 - Q3 | 0 | 0.6 | -0.9 | -0.3 |
| 2023 - Q4 | -0.1 | 0.5 | 0.7 | 1 |
| 2024 - Q1 | 0.8 | 0.2 | 0.8 | 1.8 |
| 2024 - Q2 | -0.2 | 0.5 | -0.6 | -0.3 |
| 2024 - Q3 | 0.9 | 0.5 | 0.4 | 1.8 |
| 2024 - Q4 | 0.1 | 0.4 | -1.6 | -1.1 |
| 2025 - Q1 | -0.5 | -0.7 | 2.3 | 1.2 |
Changes in labour productivity can also be explained by capital deepening and MFP growth, as shown in Figure 1.6. The growth in Domestic labour productivity of 2% in Q1 2025 compared with the previous quarter was due to positive MFP growth (2.3%) and decreased capital deepening (-0.3%).
| Timeperiod | Capital Deepening | Multifactor Productivity | Labour Productivity |
|---|---|---|---|
| 2022 - Q1 | -0.7 | -6.5 | -7.2 |
| 2022 - Q2 | 0.3 | 0 | 0.3 |
| 2022 - Q3 | 1.2 | 0.2 | 1.4 |
| 2022 - Q4 | -0.3 | 1.3 | 1 |
| 2023 - Q1 | 0.1 | 2.6 | 2.7 |
| 2023 - Q2 | 1.2 | 0.5 | 1.7 |
| 2023 - Q3 | 0.6 | -0.9 | -0.3 |
| 2023 - Q4 | 0.6 | 0.7 | 1.3 |
| 2024 - Q1 | -0.5 | 0.8 | 0.3 |
| 2024 - Q2 | 0.7 | -0.6 | 0.1 |
| 2024 - Q3 | -0.3 | 0.4 | 0.2 |
| 2024 - Q4 | 0.3 | -1.6 | -1.3 |
| 2025 - Q1 | -0.3 | 2.3 | 2 |
Figure 1.7 illustrates the evolution of MFP for the Total Economy and the Domestic and Foreign sectors since the fourth quarter of 2021. In Q1 2025, MFP recorded a quarter-on-quarter increase for the Total Economy (+7%) and for the Foreign sector (+10.6%). For the same period MFP increased for the Domestic sector (2.3%). Due to globalisation events, the Foreign sector has seen MFP increase by 40.1% since Q4 2021, resulting in Total Economy MFP growth of 12.6% over the displayed period. The multifactor productivity index for the Foreign sector has now reached the value of 140.1, with 5 consecutive quarter-on-quarter increases. Domestic sector MFP increased to its highest level in 3 years.
| Timeperiod | Total Economy | Domestic Sector | Foreign Sector |
|---|---|---|---|
| 2021 - Q4 | 100 | 100 | 100 |
| 2022 - Q1 | 98 | 93.7 | 102.3 |
| 2022 - Q2 | 99.9 | 93.7 | 107.6 |
| 2022 - Q3 | 103.2 | 93.9 | 114.4 |
| 2022 - Q4 | 104.2 | 95.2 | 116.3 |
| 2023 - Q1 | 99.3 | 97.7 | 104.6 |
| 2023 - Q2 | 99.6 | 98.2 | 105.9 |
| 2023 - Q3 | 95.1 | 97.3 | 98.1 |
| 2023 - Q4 | 94.1 | 98 | 96 |
| 2024 - Q1 | 95.5 | 98.8 | 100.9 |
| 2024 - Q2 | 96.9 | 98.2 | 105.7 |
| 2024 - Q3 | 102.8 | 98.6 | 118.2 |
| 2024 - Q4 | 105 | 97.1 | 126.1 |
| 2025 - Q1 | 112.6 | 99.3 | 140.1 |
Figure 1.8 compares labour productivity for Ireland’s Total Economy and Domestic sector to the EU average and several countries in the EU4. Ireland had the highest labour productivity (€127 per hour) in the EU in Q1 2025, above Luxembourg (€100.90per hour) and over two-and-a-half times the EU average (€46.40 per hour). Ireland’s Domestic labour productivity (€65.30 per hour) was also considerably above the EU average, and higher than all countries shown other than Luxembourg. Across the EU, average labour productivity showed a significant increase (3.7%) in Q1 2025, compared with the previous quarter.
4 For which data was available at the time of release.
| Timeperiod | Ireland - Total | Ireland - Domestic | EU Average | Czechia | France | Luxembourg | Spain |
|---|---|---|---|---|---|---|---|
| 2022 - Q1 | 112.6 | 59.5 | 44.4 | 30.7 | 55.7 | 103.4 | 38.2 |
| 2022 - Q2 | 114.5 | 59.7 | 44.5 | 30.9 | 55.2 | 101.9 | 38.6 |
| 2022 - Q3 | 120 | 60.5 | 44.8 | 30.7 | 55.4 | 101.4 | 38.8 |
| 2022 - Q4 | 119.5 | 61.1 | 44.6 | 30.6 | 55.3 | 99.1 | 39.2 |
| 2023 - Q1 | 113.2 | 62.7 | 44.3 | 30.6 | 55 | 98.6 | 38.9 |
| 2023 - Q2 | 115.1 | 63.9 | 44.5 | 30.3 | 55.4 | 98.4 | 39.2 |
| 2023 - Q3 | 110 | 63.7 | 44.4 | 30.3 | 55.4 | 98.8 | 38.9 |
| 2023 - Q4 | 110.1 | 64.5 | 44.5 | 30.1 | 55.6 | 98.5 | 39.1 |
| 2024 - Q1 | 108.3 | 64.7 | 44.4 | 30 | 55.6 | 99.6 | 39.6 |
| 2024 - Q2 | 109.5 | 64.7 | 44.6 | 29.8 | 55.6 | 100.3 | 39.6 |
| 2024 - Q3 | 116.3 | 64.8 | 44.7 | 30.1 | 55.8 | 98.2 | 39.8 |
| 2024 - Q4 | 118.7 | 64 | 44.7 | 30 | 55.9 | 98.4 | 39.5 |
| 2025 - Q1 | 127 | 65.3 | 46.4 | 30 | 56.9 | 100.9 | 41 |
Learn about our data and confidentiality safeguards, and the steps we take to produce statistics that can be trusted by all.
Statistician's Comment
The Central Statistics Office (CSO) has today (22 August 2025) published Productivity in Ireland Quarter 1 (Q1) 2025.
Commenting on the results, Kenneth Kennedy, Statistician in the National Accounts Analysis & Globalisation Division, said: “Domestic productivity in Ireland increased in January, February, and March (Q1) 2025. When compared with the previous quarter, labour productivity in the Domestic sector increased by 2% to a value of €65.30 per hour. In the Foreign sector and the total economy, labour productivity grew by 11% and 6.8% respectively in Q1 2025 (See Editor’s Note below).
While movements in productivity should generally be viewed over a longer time period, these results provide the most up-to-date picture of productivity in the Irish economy to keep policymakers, economists, and the wider public as informed as possible. Due to the considerable influence of the Foreign sector on productivity measures for the total economy, this release prioritises the Domestic sector for both presentational and analytical purposes. However, more detailed data on all sectors can be found on our open data portal, data.cso.ie, or PxStat.
Labour Productivity
Labour productivity is a key indicator for the Irish economy and measures the amount of output per hour worked in a sector. The rise in labour productivity for the total economy in Q1 2025 indicates that the economy became more efficient compared with the previous quarter. Output is measured using Gross Value Added (GVA) in constant prices in this release.
Multifactor Productivity
Multifactor productivity (MFP) is a more detailed measure of overall productivity that considers labour, capital, and additional factors such as education, skills, organisational practices, and changes in technology. MFP increased by 7% for the total economy in Q1 2025. Domestic sector MFP increased by 2.3%, while the Foreign sector MFP grew by 10.6%.”