Productivity in Ireland 2017

Source publication: Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank CSA02, StatBank PIA04

There have been substantial increases in the quantity of capital in use in the economy since 2000. One way of understanding these increases is in terms of capital stocks per employee. Ireland’s capital stock per employee has increased from 152 thousand euros per employee to 381 thousand per employee between 2000 and 2017, an increase of 150%.

Source publication: Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank CSA02, StatBank PIA04, Eurostat (capital stocks), Eurostat (employment)

Ireland had the lowest level of capital stocks per employee in 2000. This was followed closely by Germany and the UK. However, by 2017 because of significant capital deepening, capital intensity of labour had grown at a much faster rate than many other European countries and the value of capital stocks per employee is now one of the highest in Europe, just behind Luxembourg. The United Kingdom has the lowest level of capital stock per employee in 2017.

Source publication: Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank CSA02, Eurostat

The above chart shows cumulative growth in real capital stock per employee by asset type in Ireland to 2014. Transport had the largest cumulative growth in capital stock per employee at 464%, followed closely by Intangible assets at 327%. Building and Structures as well as Dwellings recorded cumulative growth of 66% and 45% respectively. Machinery and Equipment followed closely behind at 44%. Cultivated assets had the lowest cumulative growth in capital stock per employee coming in at -27%.

Get the data: StatBank CSA02, Eurostat

The above chart shows annual average growth in capital stock in the period to 2014 for various EU countries. From 2000 to 2014, the Foreign sector recorded the highest annual average growth in capital stocks coming in at 6.6%. Ireland came in at second place in the distribution at 5.2%. This was followed closely by the Domestic and Other sector which recorded an annual average growth rate of 5.1%. Denmark and the United Kingdom had the lowest annual average growth in capital stocks among the countries shown, coming in at -0.1% and 0.2%.

Get the data: StatBank CSA02, Eurostat

The chart above compares Ireland’s annual average growth in capital stocks to other EU countries from 2000 to 2017. The dramatic growth in Ireland’s capital stock in 2015, associated with the level shift in GVA in the same year, puts overall capital stock growth significantly ahead of all other EU countries over the period at 15%, where data are available. This is followed by Ireland as a whole recording an annual average growth rate of 6.6%. The Domestic and Other sector comes in at 3^rd highest place in the distribution at 4.6%. The countries with the lowest annual average growth rate to 2017 is the UK and Denmark with rates of -0.1% and 0.2%.

Source publication: Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank CSA02, StatBank PIA04

Capital services measure the productive use of capital. The volume index of capital services estimates the flow of capital services derived from all the capital assets in the economy. The main difference between the flow of capital services and the growth of capital stocks is the way in which different types and ages of assets are aggregated together. Capital services tend to grow at a faster rate than capital stocks. This can be better understood from the fact that a capital asset’s value will generally decline more quickly than its overall usefulness. Capital services are composed of the value of capital stocks weighted by the user cost for each asset. The user cost for each asset is based on the allocation of capital compensation in each asset’s sector. More information on calculating capital services can be found in the appendix.

Get the data: StatBank CSA02,StatBank PIA04

The above chart includes growth in capital stocks in 2015, 2016 and 2017. The flow of capital services in 2015 was much greater than the growth in capital stocks.

Source publication: Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank PIA04

Here we see that capital services grew at 7% or more during the years 2000 to 2007. These large increases were mainly driven by increases in the capital stock of dwellings and other buildings, during the boom period. Capital services growth was positive but lower from 2008 to 2013. Capital services growth returned to a similar growth rate in 2014 as during the 2000 to 2007 period.  Nevertheless, there have been significant increases across almost all assets categories over the entire period, for example, there are additions to transport equipment in almost every year reflecting the increased aircraft leasing activities in Ireland.

Source publication:  Estimates of the Capital Stock of Fixed Assets

Get the data: StatBank PIA04

Capital services growth since 2000 is dominated by the extraordinary increase in capital in 2015 associated with international corporate relocations and greatly increased contract manufacturing activities. It is important to note that the asset categories of Transport and Intangible assets have been combined for 2015 and subsequent years. As a result, this is labelled confidential.