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« Fiscal Rules: Heads You Lose, Tails You Lose | Main | The Incredible (Slowly) Shrinking State »

April 17, 2018

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Seamus Coffey

There is probably a bit to go before GNI* is useful for comparisons like this.

Nominal GNI*
2007: €168,583m
2016: €189,163m

Aggregate national income in 2016 was probably higher than it was in 2007 but not 12.2% higher, even if the figures are nominal. It seems likely there is still a wrinkle or two in GNI* to be ironed out.

We can get a fairly good insight on Irish-owned companies in the structural business statistics published by Eurostat.

Here are some outcomes for "companies controlled by the reporting country" excluding:
NACE K: Finance and Insurance (as it is not included in the dataset), and
NACE N: Administration and Support Services (as “Irish” aircraft leasing companies mess up the data).

1 Profit Rate: Gross Operating Surplus as a % of turnover
2 Profit Share: Gross Operating Surplus as a % of Gross Value Added
3 Labour Share: Personnel Costs as a % of Gross Value Added
4 Investment Rate: Investment in Tangible Goods as a % of Gross Operating Surplus

[#4 further excludes the manufacturing sector due to €8 billion figure for 2014; it is usually a couple of hundred million. Manufacturing is in #1, #2 and #3.]

So what do we see?

The outcomes for Ireland are given as well as the arithmetic average for the other nine EU countries in our "peer group" and Ireland's rank within that group. All figures are for 2014.

Profit Rate
Ireland: 7.9%
Peer Average: 10.3%
Ireland Rank: 8/10

Profit Share
Ireland: 32.6%
Peer Average: 39.1%
Ireland Rank: 9/10

Labour Share
Ireland: 67.4%
Peer Average: 60.9%
Ireland Rank: 2/10

Investment Rate
Ireland: 48.2%
Peer Average: 54.0%
Ireland Rank: 6/10

So, Irish-controlled companies are low profit, low profit share, high labour share and near average investors in tangible goods compared to those countries in the selected peer group. Maybe it's not a pay rise we need but a profit rise!

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