Sunday, February 5, 2012

5/2/2012: Irish Labour Productivity - some latest trends

Chart of the Week, folks, comes courtesy of the ECB database on labour productivity. It contains the full set of productivity indices for Ireland by sector, reported on the basis of productivity per person employed. And it speaks volumes of the myths we hear in the media.

So the Chart of the Week is:

Now, what does it tell us? (And please, no protests - I am decomposing the above chart into some interesting trends using as illustrations more charts).
  • Irish productivity - overall, across all sectors - has been rising during the crisis 
  • Although as I pointed out so many times, much of this rise in Ireland's overall productivity is due to jobs destruction in retail, construction and other sectors, not to some intrinsic rises in real productivity. Jobs destruction concentrated in less productive sector helps overall total productivity. Despite the fact that it causes massive unemployment and other problems. See chart below for evidence on this.
  • Another interesting feature of the data is the rapid, continuous decline in productivity in the broadly-defined public sector, arrested around Q3 2010 and now running basically flat. But historically, public sector productivity has contributed negatively to overall productivity performance of the economy.

  • Overall, so far, our labour productivity is 5.2% ahead of the EA17 and 4.7% ahead of EU27 in Q3 2011. Year on year, EA 17 labour productivity is up 1.04%, EU27 is up 1.34% and Irish total labour productivity is up 2.28%. This is a strong performance for Ireland, compared to EU and EA averages. As already mentioned above, Construction sector productivity declined in Q3 2011 some 15.2% yoy and productivity in Information & Communication sector fell 8.15% yoy. Productivity grew in Financial and Insurance Activities sector by 3.11%, in Agriculture and associated sub-sectors by a very impressive 24.8% (although this is largely due to higher commodities prices and exchange rates effects, as well as continued robust inflows of CAP money into Ireland). In Public Administration and the rest of the public sector sub-sectors, productivity grew 2.6% year on year in Q3 2011.
And to summarize the emerging new (crisis-period post Q1 2008) trends, here is a chart plotting correlations between productivity index performance for Ireland overall, against EU27, EA17 and specific sectors of the economy:


Ernie Ball said...

What are the measures of public sector "productivity"?

And why have you posted no link to the data?

Frankly, given your known biases, is there any reason to believe that this is anything more than what I'd read in the Sindo on any given week, i.e., public sector=evil, private sector=good?

TrueEconomics said...

Frankly, if you are concerned with baises, be my guest - stop reading.

Data link - ECB - feel free to explore:

Ernie Ball said...

Anyone concerned about your biases can f off with themselves so you can continue to preach to libertarian fellow travellers? Do I have that right?

It's a wonder anyone takes you seriously. I expect that a Sindo column to open up for you any day now.

TrueEconomics said...

Ernie. perhaps you are unfamiliar with basic courtesy or politeness. Since someone at some point in time has to teach you these here's a quick synopsis.

This site is a personal site. It is my site. Not yours. You are, therefor, a guest here. Not the master.

If you have a legitimate question you can expect to get a legitimate answer.

If you have no respect for the site author, you should stop reading it. That is your freedom. It is my freedom to ask you to leave this site.

If you are rude, abusive and have no understanding of proper behavior your comments will no longer appear here.

You are not 'anyone concerned' you are Ernie Ball who is, as described - rude, disrespectful and lacking those basic traits of a person I like to see in those reading my blog.

Good by.

Anonymous said...

So is there evidence that core productivity is improving in Ireland or is it just mix? E.g. Are labour markets getting more flexible?