Labour productivity falls by 2.2% despite steady growth in employment

"Labour productivity measures the amount of output per hour worked in a sector, so the fall in labour productivity for the total economy in Q2 2024 indicates that the economy became less efficient compared with the previous quarter," said Kenneth Kennedy, Statistician in the CSO's National Accounts Analysis and Globalisation Division.

Total Economy multifactor productivity declined by 0.5% in the three month period.

Multifactor productivity, which Mr Kennedy referred to as "a more detailed measure of overall productivity that considers labour, capital, as well as additional factors such as education, skills, changes in technology," fell by 2.6% in the domestic sector, but increased by 4.3% in the foreign sector.

Despite the recent fall in labour productivity, new figures from the CSO also show that employment continues to grow, with its Monthly Employee Index for August increasing by 0.2%.

The monthly employee index for males increased by 0.1%, while the employee index for females increased by 0.2% over the same period, the CSO said.

The seasonally adjusted employee index was up by 2.6% in the 12 months to August 2024. Taking age into account, decreases in the monthly index were seen in the 15-19 years (-0.6%) and 65 years and over (-0.3%) age groups.

The sectors with the largest monthly increase in August 2024 were Human Health and Social Work Activities and Transportation and Storage, which both grew by 0.5% in the period.

The largest monthly decreases in August 2024 were in Services, down 2.8%, followed by Professional, Scientific & Technical Activities which dropped by 0.9%. However, the CSO noted that services is the smallest sector, with 4,300 employees in August. 

In the 12 months to August 2024, the economic sectors that observed the largest rise in the number of employees was in Public Administration & Defence, up 6.7%, and Human Health & Social Work Activities, up 6%.