Productivity in Ireland 2018

Source publication: National Income and Expenditure 2018 Tables 1-22 and Annex 1 for 1995-2018 (XLS 396KB)

Get the data: Statbank PIA04 

The figure above shows labour productivity analysed by MFP and capital deepening. Capital deepening measures growth in the capital intensity of labour (the amount of capital available per hour worked). The recorded productivity growth of 4.2% in 2018 is linked to an increased role of MFP and a decreased contribution of capital services. This is explained further in Table 3.1 above, where the decreased capital deepening is evident in Manufacturing, with the result that MFP has increased. A decline in capital deepening has been evident for the last three years, largely due to the decline in capital services, while hours worked has remained steady or slightly increased over the same period. The only year in the series with a negative labour productivity result was 2013 due to negative contributions from both inputs.

Get the data: Statbank PIA05 

In 2018, labour productivity growth was flat, the lowest result since 2013. This absence of growth in labour productivity is explained in chart 2.4, where both hours worked and GVA were growing at the same rate of 3.8%. Strong growth was evident in 2018 as explained in the details of Table 3.1 above, where GVA growth in Wholesale and Retail increased 6% in 2018 while GVA growth in Construction increased 10% on 2017. Labour growth was also recorded in the Public Admin sectors. Looking briefly at earlier years, labour productivity growth followed an increasing path from 2008 until 2010, mainly due to increased capital deepening and increased MFP, particularly in 2010.

Get the data: Statbank PIA05 

The chart above shows a breakdown of labour productivity to 2018 in the Foreign sector. In 2018, labour productivity grew at 12%, a doubling of the 6% result recorded in 2017. This is mainly due to increased MFP, associated with strong GVA growth in Manufacturing and ICT, very small growth in labour and a reduction in the additions to capital assets. The years 2016 and 2017 saw increases in labour productivity of 1.2% and 6.1%, which reflected results in line with the series prior to 2015.

Get the data: Statbank PIA04

The figure above displays annual average labour productivity growth over the period, with the Manufacturing sector and Professional, Scientific and Support services sector showing the fastest growth. Information and Communication has also shown strong growth in labour productivity. The continued high productivity achieved in the MNE dominated sectors of Manufacturing and ICT is evident from the chart. The Professional and Scientific sector comprising both Foreign and Domestic and Other activities, such as Aircraft Leasing, Research and Development and Legal and Accounting activities, accounts for a substantial share of aggregate capital deepening during the period, largely explained by additions of aircraft to existing fleets or new fleets entirely. The Domestic and Other sectors recorded lower levels of growth and are at the left side of the chart. Accommodation and Food recorded low growth over the period. This is partly due to GVA growth and hours growing at the same rate over the period, while capital deepening contributes to the positive labour growth in the Wholesale and Retail sector. The positive contribution of capital deepening is in part due to increased investment in fixed assets in the sector, particularly in 2017. In comparison to Wholesale and Retail, the Agricultural sector also recorded positive labour productivity growth of 0.7% in the period to 2018, driven by increased capital deepening. This increase could be due to the increased investment in farm machinery and equipment as farmers increased their use of technology over the eighteen-year period.