Productivity races ahead in Republic

The Republic boasts the third most productive workers globally, according to a new United Nations report, and output here is …

The Republic boasts the third most productive workers globally, according to a new United Nations report, and output here is rising faster than in any other industrialised state.

Ireland ranks behind only the United States and Belgium in productivity terms, the International Labour Organisation's Key Indicators of the Labour Market report states, with output per person topping $52,000 (€47,380).

The figure puts the Irish workforce well ahead of Britain, Germany and Japan, which have outputs ranging between $42,000 and $45,000 per head.

The data are affected somewhat by the fact that workers in the United States, and to a lesser extent Ireland, work more hours than some of our European neighbours. But even on the basis of output per working hour, Ireland ranks fifth behind Norway, France, Belgium and the US.

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The UN body said productivity in Ireland had more than doubled between 1980 and 2002, the most recent year for which figures are available.

The rate of increase in productivity in Ireland last year at 2.2 per cent was twice the 1.1 per cent rate recorded for the European Union as a whole, though still short of the 2.8 per cent attained by the US. Greece notched up the fastest rate of growth last year, at 4.1 per cent, but still lags its European peers.

Over the longer terms, the US has seen output grow at an average of 2.2 per cent each year over the last seven years, almost twice the 1.2 per cent in the EU.

Ireland and Finland were the only European states to match the United States in the "production and diffusion of information and communication technology (ICT) in an enabling economic environment" in the 1990s, the report states.

This and the growth in service industries, such as the wholesale and retail trade and financial securities, that rely on such technology was seen by the ILO as the key factor fuelling productivity in the period.

The biennial report notes the number of hours worked has fallen in recent years. The decrease in the US is less than that in most European economies. Irish people worked the fourth longest hours (1,668 hours in 2002) among industrialised states behind the US, Portugal and Finland.

On employment, Europe has done better than the US in recent times. About half of EU states now have lower unemployment than the US, which has traditionally led in this area. Ireland's performance - from having one of the highest rates in Europe in the early 1990s to having an unemployment rate below the US in 2002 - is highlighted in the report.

Dominic Coyle

Dominic Coyle

Dominic Coyle is Deputy Business Editor of The Irish Times