In this paper results from steady and unsteady CFD simulations of an industrial transonic compressor are compared, in order to gain a better understanding of the cause of the differences in the predicted efficiencies between the steady and unsteady simulations. Initially the first stage is simulated as an isolated compressor stage with inlet guide vanes in order to analyse the effect of individual blade rows on the stage performance. It is found that the rotor efficiency is lower for steady simulations than for unsteady simulations due to stronger shock waves. The stator efficiency is greater in the steady simulations due to not being able to model the interaction of the rotor wakes with the stator blade leading edge and boundary layers. Greater variation between steady and unsteady predictions is found at higher operating speeds. In the 3-stage unsteady simulations, the front stage efficiency characteristic is the same as the efficiency calculated from the isolated unsteady simulations. This shows that the unsteady pressure potential propagating from the downstream stages has no significant effect on the front stage efficiency meaning that the designer does not need to give great consideration to the downstream blade rows when predicting the characteristics of the front stage.