Irish workforce among most productive in the world, CSO report finds

Irish workers have one of the highest rates of productivity in the world, according to new figures from the Central Statistics Office (CSO).

The agency’s latest Productivity in Ireland report indicates that workers here added, on average, €102 of value per hour of work in 2021. The headline figure was, however, highly inflated by the multinational-dominated manufacturing and ICT sectors.

Labour productivity typically measures the value of work done in an economy over time with higher value-added jobs generating the greatest productivity. The high performing sectors here were manufacturing (€302/hour) and information and communications (€255/hour).

When these globalised or multinational sectors are removed, productivity in the domestic or deglobalised sector was €56 per hour of work, which was “considerably closer” to the EU average of €38/hour.

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While Ireland had one of the highest productivity levels – defined as gross value added per employee – in the EU, it also reported greenhouse gas emissions per employee in 2021 that were over 1.5 times that of the EU average.

Agriculture had the second highest greenhouse gas emissions per employee in 2021 but accounted for the largest proportion of greenhouse gas emissions of any sector. This is primarily due to the large cattle herd in Ireland, the report indicated.

A huge level of investment by multinationals in the Irish economy since 2015, including billions of euro worth of intellectual property, has boosted labour productivity here. The CSO said foreign-owned companies were found to be at least twice as productive as domestic-owned companies in eight of the 20 economic sectors analysed.

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“Because of the concentration of high performing multinational enterprises, foreign-owned companies are, in general, at least five times more productive than domestic firms,” the agency said. “This applies in particular to sectors such as software and computer programming, pharmaceuticals and computer, electronic and optical products,” it said.

“Although these sectors had a high concentration of multinational activity, there were significant domestic activities also associated with them,” the agency said. “Many of these domestic companies are also significant employers. For example, domestic companies in software and computer programming accounted for 35 per cent of employment in the sector,” it said.

Domestic labour productivity declined by 1 per cent as hours worked grew faster than the CSO measure of productivity – gross value added. This was associated with a return to work in sectors such as accommodation and food, transportation and storage, construction and arts as the Covid-19 restrictions were gradually eased during the year.