Labour productivity in Republic grows at three times EU rate

However, much of the growth is driven by multinationals and the transfer of intellectual property assets here

The CSO said that productivity in sectors dominated by foreign-owned multinationals rose 8.8 per cent annually during the period, while productivity in the domestic sector rose by 0.83 per cent a year.  Photograph: Dara Mac Dónaill

The CSO said that productivity in sectors dominated by foreign-owned multinationals rose 8.8 per cent annually during the period, while productivity in the domestic sector rose by 0.83 per cent a year. Photograph: Dara Mac Dónaill

 

Labour productivity in the Republic – a key driver of income – grew at three times the European average between 2010 and 2019, figures from the Central Statistics Office (CSO) show.

Productivity is loosely defined as the rate at which goods or services are produced in an economy

The CSO estimates it grew by an average of 3.6 per cent a year prior to the pandemic, more than three times the EU average of 1 per cent.

Much of the strong growth is driven by multinationals and the transfer of intellectual property assets here since 2015.

The CSO said that productivity in sectors dominated by foreign-owned multinationals rose 8.8 per cent annually during the period, while productivity in the domestic sector rose by 0.83 per cent a year.

Declining

Conversely the Republic’s “labour share” – defined as the proportion of value attributed to labour as opposed to capital – has been declining and is one of the lowest in Europe.

It fell to a series low in 2018/2019 of 33 per cent, down from 49 per cent in 2010.

“The increased globalisation of the Irish economy has resulted in ongoing additions to the capital stock and in particular additions of intangibles such as Intellectual Property Products (IPP),” the agency said.