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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 (€100.80 per hour) decreased by 2.2% in Q2 2024 compared with Q1 2024.
Labour productivity for the Domestic sector (€62.10 per hour) fell by 2% in Q2 2024 compared with Q1 2024, while labour productivity for the Foreign sector (€327.90 per hour) was down by 7.3%.
Total Economy multifactor productivity declined by 0.5% in Q2 2024 compared with Q1 2024.
Multifactor productivity for the Domestic sector fell by 2.6%, while Foreign sector multifactor productivity increased by 4.3%.
In this release, the term Foreign sector refers to Foreign-Owned Multinational Enterprise (MNE) dominated sectors. 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 MNE-dominated 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. Changes in labour productivity for a sector can also be explained by factors other than GVA and hours worked, such as the level of capital and multifactor productivity (MFP) growth, all of which are presented below.
| Timeperiod | Domestic Sector | Foreign Sector | Total Economy |
|---|---|---|---|
| 2019 - Q1 | 57.8 | 326.2 | 88.6 |
| 2019 - Q2 | 58.7 | 356.8 | 93.9 |
| 2019 - Q3 | 59.4 | 347.2 | 95 |
| 2019 - Q4 | 59.6 | 355.1 | 95.4 |
| 2020 - Q1 | 61.7 | 391.1 | 101.9 |
| 2020 - Q2 | 67 | 385.5 | 118.3 |
| 2020 - Q3 | 59.2 | 417.3 | 106.3 |
| 2020 - Q4 | 62.1 | 387.9 | 108.3 |
| 2021 - Q1 | 66.2 | 420 | 120.7 |
| 2021 - Q2 | 62.1 | 428.2 | 114.3 |
| 2021 - Q3 | 59.4 | 459.9 | 113 |
| 2021 - Q4 | 62 | 407.2 | 112.8 |
| 2022 - Q1 | 59.4 | 416.6 | 111.5 |
| 2022 - Q2 | 59.6 | 439.8 | 112.5 |
| 2022 - Q3 | 59.8 | 482.4 | 118.3 |
| 2022 - Q4 | 59.7 | 469.2 | 116.2 |
| 2023 - Q1 | 61.5 | 401.3 | 109.1 |
| 2023 - Q2 | 62.7 | 400.6 | 109.5 |
| 2023 - Q3 | 61.6 | 373.9 | 104.9 |
| 2023 - Q4 | 62.1 | 372.4 | 103.6 |
| 2024 - Q1 | 63.4 | 352.6 | 103 |
| 2024 - Q2 | 62.1 | 327.9 | 100.8 |
Get the data: PxStat PIQ02
Labour productivity for the Total Economy (€100.80 per hour1) fell by 2.2% in the second quarter of 2024. Labour productivity was down in the Foreign sector (€327.90 per hour, -7.3%) and decreased in the Domestic sector (€62.10 per hour, -2%) compared with Q1 2024.
1 All results presented in this release are seasonally-adjusted unless otherwise stated.
| Timeperiod | Labour Productivity | Hours Worked | Gross Value Added |
|---|---|---|---|
| 2019 - Q1 | -0.6 | 1.6 | 1.1 |
| 2019 - Q2 | 1.7 | -0.6 | 1.1 |
| 2019 - Q3 | 1.1 | -0.2 | 0.9 |
| 2019 - Q4 | 0.4 | 1.3 | 1.7 |
| 2020 - Q1 | 3.4 | -3.2 | 0.2 |
| 2020 - Q2 | 8.3 | -28.3 | -20 |
| 2020 - Q3 | -12.4 | 24 | 11.6 |
| 2020 - Q4 | 4.8 | -3.2 | 1.6 |
| 2021 - Q1 | 6.3 | -5.6 | 0.7 |
| 2021 - Q2 | -6.3 | 9.2 | 2.9 |
| 2021 - Q3 | -4.6 | 6.2 | 1.6 |
| 2021 - Q4 | 4.3 | -0.4 | 4 |
| 2022 - Q1 | -4.2 | 2.3 | -1.9 |
| 2022 - Q2 | 0.2 | 2.3 | 2.5 |
| 2022 - Q3 | 0.4 | -0.6 | -0.2 |
| 2022 - Q4 | -0.1 | 1.1 | 0.9 |
| 2023 - Q1 | 2.9 | 0.9 | 3.8 |
| 2023 - Q2 | 1.9 | -0.3 | 1.6 |
| 2023 - Q3 | -1.7 | 0.5 | -1.3 |
| 2023 - Q4 | 0.8 | -0.1 | 0.8 |
| 2024 - Q1 | 2 | 0.6 | 2.6 |
| 2024 - Q2 | -2 | -0.5 | -2.5 |
Get the data: PxStat PIQ02
Domestic labour productivity decreased by 2% in Q2 2024, compared with the previous quarter. Both GVA and hours worked fell in the Domestic sector, by 2.5% and 0.5% respectively. The quarter-on-quarter decrease in Domestic GVA was due to contraction in sectors such as Financial & Insurance Activities (-10.3%) and Professional, Scientific & Technical Activities (-2.6%). Other sectors showed declines in GVA, for example, Accommodation & Food Service Activities (-3.2%) and Transportation & Storage (-10%).
Hours worked displayed varying results across the Domestic sectors with Real Estate Activities (+10.5%) and Professional, Scientific & Technical Activities (+4.5%) showing increased hours worked in the quarter, while Wholesale & Retail (-5%) and Construction (-4.7%) showed declines in hours worked.
The Public Administration, Education & Health sector (+0.2%) made the largest positive contribution to Domestic GVA growth while Financial & Insurance Activities (-1%) and Professional, Scientific & Technical Activities (-0.4%) made the most significant negative contributions.
| Description | Reallocation Effect | Productivity Effect | Contribution |
|---|---|---|---|
| Public Administration, Education & Health (O-Q) | 0.616 | -0.182 | 0.434 |
| Professional, Scientific & Technical Activities (M) | 1.127 | -0.866 | 0.261 |
| Real Estate Activities (L) | 1.291 | -1.187 | 0.105 |
| Energy & Water (D-E) | 0.357 | -0.261 | 0.096 |
| Transportation & Storage (H) | 0.632 | -0.559 | 0.073 |
| Agriculture, Forestry & Fishing (A) | -0.016 | 0.07 | 0.053 |
| Mining & Quarrying (B) | 0.076 | -0.063 | 0.014 |
| Construction (F) | -0.288 | 0.193 | -0.095 |
| ICT and Administrative & Support Services - Domestic | -0.298 | 0.137 | -0.161 |
| Accommodation & Food Service Activities (I) | -0.032 | -0.17 | -0.201 |
| Arts, Entertainment & Other Services (R-T) | -0.017 | -0.254 | -0.272 |
| Manufacturing - Domestic | -0.493 | 0.13 | -0.364 |
| Financial & Insurance Activities (K) | -0.361 | -0.55 | -0.911 |
| Wholesale & Retail (G) | -1.657 | 0.627 | -1.03 |
| Domestic Sector | 0.938 | -2.936 | -1.998 |
Get the data: PxStat PIQ04
Labour productivity growth for the Domestic sector can be broken down into the contributions of each of its subsectors2, as shown in Figure 1.3. 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 (Reallocation Effect or Composition Effect). Positive labour productivity growth for a subsector will always lead to a positive Productivity Effect, however the Reallocation Effect depends on how productive the subsector is compared to 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 decrease in Domestic labour productivity can be explained by a Productivity Effect of -2.9% and a Reallocation Effect of 0.9%. This means that declines in subsector productivity (Productivity Effect) had a larger impact than improvements in the composition of the sector (Reallocation Effect) on Domestic labour productivity growth for the quarter. Wholesale & Retail (-1%) and Financial & Insurance Activities (-0.9%) made the most significant negative contributions to Domestic labour productivity growth. Public Administration, Education & Health (0.4%) and Professional, Scientific & Technical Activities (+0.3%) made the largest positive contributions.
2 For confidentiality purposes, the contributions of Information & Communications – Domestic and Administrative & Support Services – Domestic have been combined in Figure 1.3.
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 of these features.
| Timeperiod | Labour Contribution | Capital Contribution | Multifactor Productivity | Gross Value Added |
|---|---|---|---|---|
| 2019 - Q1 | 0.9 | 0.3 | -0.2 | 1.1 |
| 2019 - Q2 | -0.4 | 1.1 | 0.3 | 1.1 |
| 2019 - Q3 | -0.1 | 0 | 1 | 0.9 |
| 2019 - Q4 | 0.8 | 0.7 | 0.2 | 1.7 |
| 2020 - Q1 | -1.8 | 0.3 | 1.6 | 0.2 |
| 2020 - Q2 | -15.9 | 0.1 | -4.2 | -20 |
| 2020 - Q3 | 13.1 | 0.5 | -2 | 11.6 |
| 2020 - Q4 | -1.8 | 0.5 | 2.9 | 1.6 |
| 2021 - Q1 | -3.1 | 0.1 | 3.7 | 0.7 |
| 2021 - Q2 | 5 | 0.5 | -2.5 | 2.9 |
| 2021 - Q3 | 3.4 | 0.5 | -2.3 | 1.6 |
| 2021 - Q4 | -0.2 | 0.6 | 3.6 | 4 |
| 2022 - Q1 | 1.2 | 0.8 | -4 | -1.9 |
| 2022 - Q2 | 1.2 | 0.6 | 0.7 | 2.5 |
| 2022 - Q3 | -0.3 | 0.6 | -0.5 | -0.2 |
| 2022 - Q4 | 0.6 | 0.6 | -0.2 | 0.9 |
| 2023 - Q1 | 0.5 | 0.8 | 2.5 | 3.8 |
| 2023 - Q2 | -0.2 | 0.6 | 1.2 | 1.6 |
| 2023 - Q3 | 0.2 | 0.6 | -2.1 | -1.3 |
| 2023 - Q4 | 0 | 0.7 | 0.1 | 0.8 |
| 2024 - Q1 | 0.3 | -1 | 3.3 | 2.6 |
| 2024 - Q2 | -0.3 | 0.4 | -2.6 | -2.5 |
Get the data: PxStat PIQ02
Figure 1.4 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.
Domestic GVA fell by 2.5% in the second quarter of 2024, explained by MFP decline of 2.6%, negative labour contribution of 0.3%, and by capital contribution increase of 0.4%.
| Timeperiod | Capital Deepening | Multifactor Productivity | Labour Productivity |
|---|---|---|---|
| 2019 - Q1 | -0.4 | -0.2 | -0.6 |
| 2019 - Q2 | 1.3 | 0.3 | 1.7 |
| 2019 - Q3 | 0.1 | 1 | 1.1 |
| 2019 - Q4 | 0.2 | 0.2 | 0.4 |
| 2020 - Q1 | 1.7 | 1.6 | 3.4 |
| 2020 - Q2 | 12.5 | -4.2 | 8.3 |
| 2020 - Q3 | -10.4 | -2 | -12.4 |
| 2020 - Q4 | 1.9 | 2.9 | 4.8 |
| 2021 - Q1 | 2.7 | 3.7 | 6.3 |
| 2021 - Q2 | -3.8 | -2.5 | -6.3 |
| 2021 - Q3 | -2.3 | -2.3 | -4.6 |
| 2021 - Q4 | 0.8 | 3.6 | 4.3 |
| 2022 - Q1 | -0.2 | -4 | -4.2 |
| 2022 - Q2 | -0.4 | 0.7 | 0.2 |
| 2022 - Q3 | 0.9 | -0.5 | 0.4 |
| 2022 - Q4 | 0.1 | -0.2 | -0.1 |
| 2023 - Q1 | 0.4 | 2.5 | 2.9 |
| 2023 - Q2 | 0.8 | 1.2 | 1.9 |
| 2023 - Q3 | 0.4 | -2.1 | -1.7 |
| 2023 - Q4 | 0.7 | 0.1 | 0.8 |
| 2024 - Q1 | -1.3 | 3.3 | 2 |
| 2024 - Q2 | 0.6 | -2.6 | -2 |
Get the data: PxStat PIQ02
Changes in labour productivity can also be explained by capital deepening and MFP growth, as shown in Figure 1.5. The decline in Domestic labour productivity by 2% in Q2 2024 compared with the previous quarter was due to negative MFP growth (-2.6%) and increased capital deepening (0.6%).
The significant rise and fall in capital deepening in Q2 2020 and Q3 2020 were due to movement in hours worked rather than changes in capital. As hours worked fell with almost no change to capital, there was relatively more capital available to each worker, leading to positive capital deepening in Q2 2020. When hours worked rebounded in the subsequent quarter, there was an opposite effect, resulting in negative capital deepening.
| Timeperiod | Total Economy | Domestic Sector | Foreign Sector |
|---|---|---|---|
| 2018 - Q4 | 100 | 100 | 100 |
| 2019 - Q1 | 97.2 | 99.8 | 94.3 |
| 2019 - Q2 | 100.6 | 100.2 | 101.4 |
| 2019 - Q3 | 101.3 | 101.2 | 101.2 |
| 2019 - Q4 | 98.5 | 101.4 | 93.5 |
| 2020 - Q1 | 99.3 | 103.1 | 92.4 |
| 2020 - Q2 | 98.6 | 98.8 | 96.2 |
| 2020 - Q3 | 101.5 | 96.9 | 103.2 |
| 2020 - Q4 | 101.8 | 99.7 | 101.2 |
| 2021 - Q1 | 111.2 | 103.5 | 116.8 |
| 2021 - Q2 | 111.7 | 100.9 | 121.3 |
| 2021 - Q3 | 114.4 | 98.6 | 130 |
| 2021 - Q4 | 114.7 | 102.2 | 127.2 |
| 2022 - Q1 | 114.5 | 98.2 | 132.1 |
| 2022 - Q2 | 116.6 | 98.9 | 137.1 |
| 2022 - Q3 | 121.5 | 98.4 | 149 |
| 2022 - Q4 | 120.7 | 98.2 | 149.5 |
| 2023 - Q1 | 113.4 | 100.7 | 131.1 |
| 2023 - Q2 | 113 | 101.9 | 129.7 |
| 2023 - Q3 | 108.5 | 99.7 | 123.3 |
| 2023 - Q4 | 106.3 | 99.8 | 118.9 |
| 2024 - Q1 | 107.9 | 103.2 | 118 |
| 2024 - Q2 | 107.4 | 100.5 | 123.2 |
Get the data: PxStat PIQ02
Figure 1.6 illustrates the evolution of MFP for the Total Economy and Domestic and Foreign sectors since the fourth quarter of 2018. In Q2 2024, MFP recorded a quarter-on-quarter decrease for the Total Economy (-0.5%) and for the Domestic sector (-2.6%). For the same period MFP increased for the Foreign sector (4.3%). Due to globalisation events, the Foreign sector has seen MFP increase by 23.2% since Q4 2018, resulting in Total Economy MFP growth of 7.4% over the displayed period. The multifactor productivity index for the Foreign sector has now reached the value of 123.2, down from a peak of 149.3 in Q4 2022.
| Timeperiod | Ireland - Total | Ireland - Domestic | EU Average | Czechia | France | Luxembourg | Spain |
|---|---|---|---|---|---|---|---|
| 2022 - Q1 | 111.5 | 59.4 | 41.7 | 27.4 | 53.2 | 98.4 | 35.8 |
| 2022 - Q2 | 112.5 | 59.6 | 41.7 | 27.7 | 52.8 | 96.9 | 35.9 |
| 2022 - Q3 | 118.3 | 59.8 | 42 | 27.6 | 52.9 | 96.2 | 36.5 |
| 2022 - Q4 | 116.2 | 59.7 | 41.7 | 27.5 | 52.7 | 94.9 | 36.8 |
| 2023 - Q1 | 109.1 | 61.5 | 41.6 | 27.5 | 52.6 | 92.9 | 36.5 |
| 2023 - Q2 | 109.5 | 62.7 | 41.7 | 27.4 | 52.8 | 94.3 | 36.6 |
| 2023 - Q3 | 104.9 | 61.6 | 41.7 | 27.5 | 52.9 | 93.7 | 36.4 |
| 2023 - Q4 | 103.6 | 62.1 | 41.8 | 27.3 | 53 | 93.6 | 36.6 |
| 2024 - Q1 | 103 | 63.4 | 44.3 | 30.7 | 56.1 | 96.4 | 39.1 |
| 2024 - Q2 | 100.8 | 62.1 | 44.4 | 30.7 | 56.1 | 97.6 | 39 |
Get the data: PxStat PIQ02 (CSO); NAMQ_10_A10 and NAMQ_10_A10_E (Eurostat)
Figure 1.7 compares labour productivity for Ireland’s Total Economy and Domestic sector to the EU average and several countries in the EU3. Ireland had the highest labour productivity (€100.8 per hour) in the EU in Q2 2024, above Luxembourg (€97.6 per hour) and over double the EU average (€44.4 per hour). Ireland’s Domestic labour productivity (€62.1 per hour) was also considerably above the EU average, and higher than all countries shown other than Luxembourg. Across the EU, average labour productivity remained stable (+0.1%) in Q2 2024, compared to the previous quarter.
3 For which data was available at the time of release.
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Statistician's Comment
The Central Statistics Office (CSO) has today (18 October 2024) published Productivity in Ireland Quarter 2 (Q2) 2024.
Commenting on the results, Kenneth Kennedy, Statistician in the National Accounts Analysis & Globalisation Division, said: “Domestic productivity in Ireland fell in April, May, and June (Q2) 2024. When compared with the previous quarter, labour productivity in the Domestic sector decreased by 2% to a value of €62.10 per hour. In the Foreign sector and the total economy, labour productivity fell by 7.3% and 2.2% respectively in Q2 2024. (See Editor’s Note below). The Foreign sector has exhibited a general downward trend in labour productivity since Q4 2022.
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 PxStat statistical database.
Labour Productivity
Labour productivity measures the amount of output per hour worked in a sector, so the fall in labour productivity for the total economy in Q2 2024 indicates that the economy became less efficient compared with the previous quarter.
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 contracted by 0.5% for the total economy in Q2 2024. Domestic sector MFP fell by 2.6%, while the Foreign sector MFP increased by 4.3%."