Productivity in Ireland 2019

This publication has presented new CSO results for productivity in the Irish economy since 2000. Some of the key findings are outlined below.

Productivity results for the Irish economy are in general significantly improved by the impact of globalisation, particularly since 2015. The guidance on interpreting the results presented in this report are that the Domestic and Other sector results provide a more meaningful measure for overall productivity trends in the underlying economy as they exclude these globalisation effects when compared to results for the Foreign-dominated Sector and Ireland-Total.

The Domestic and Other Sector results for the period 2010 – 2019 were that Labour Productivity grew by 0.8% which compares with an EU average of 1% and Euro Area average of 0.8% for the same period. On the other hand, the results of 8.8% for Ireland-Foreign and 3.6% for Ireland-Total are difficult to interpret in the context of other EU countries.

Multi-factor productivity (MFP) has played a significant role explaining Ireland’s economic growth over the period 2010-2019. This point is comprehensively illustrated in the report. Average growth was unchanged in the Domestic and Other sector for the period 2010-2019, while average growth in the Irish economy as a whole was -1.4%. Average MFP growth in the Foreign-dominated sector was -8.7%. Once again, the impact of globalisation resulting in large additions to the Capital Stock and corresponding growth in Capital Services has had a negative impact on Foreign sector MFP results.

In general, productivity growth in the Irish economy is driven by Capital Services. This is particularly true of the period following 2015 and the associated globalisation events.