European labour costs slightly higher, bad news for competitiveness

Eurostat, the statistical office of the European Union, released Thursday data on hourly labour costs in the euro zone and in the EU. In both instances, the records indicate a very small increase but enough to strengthen the argument of those governments introducing wide-reach labour market reforms.

Hourly labour costs in the euro area rose by 2.8% in the year up to the fourth quarter of 2011, compared with 2.6% for the previous quarter. In the EU27, the annual rise was 2.7% up to the fourth quarter of 2011, compared with 2.6% for the previous quarter.

The two main components of labour costs are wages and salaries, and non-wage costs. In the euro area, wages and salaries per hour worked grew by 2.5% in the year up to the fourth quarter of 2011, and the non-wage component by 3.5%, compared with 2.4% and 3.1% respectively for the third quarter of 2011. In the EU27, hourly wages and salaries rose by 2.6% and the non-wage component by 3.5% in the year up to the fourth quarter of 2011, compared with 2.5% and 3.2% respectively for the third quarter of 2011.

The breakdown by economic activity shows that in the euro area hourly labour costs rose by 3.3% in industry and 2.6% in both construction and services in the year up to the fourth quarter of 2011. In the EU27, labour costs per hour grew by 3.2% in industry, 2.7% in construction and 2.5% in services.

Over the whole year 2011, hourly labour costs increased by 2.8% in the euro area and by 2.7% in the EU27, compared with 1.5% and 1.7% respectively in 2010.

 

About the Author

Victor Jimenez
London contributor at thecorner.eu, reporting about the City and the Eurozone economies. He regularly writes for Spanish newspaper group Prensa Ibérica--some of his features include shared work with journalists of The Daily Telegraph and the BBC.

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