ZAGREB, 2 April, 2021 - Croatia is the only EU member state outside the euro area to have recorded a decrease in hourly labour costs in 2020, a Eurostat report shows.

Last year, hourly labour costs rose by an average of 3.1% in the EU and by 2.9% in the euro area.

Among the non-euro area countries, the highest increases in hourly labour costs expressed in the national currency were observed in Hungary (+7.9%), Bulgaria (+7.8%), the Czech Republic (+7.4%) and Romania (+7.2%). The lowest increases were registered in Sweden (+1.1%) and Denmark (+2.0%). 

Croatia was the only non-euro area country to see a drop in hourly labour costs (-1.0%).

Among the euro area member states, the highest increases in hourly labour costs were reported in Portugal (+8.6%), Lithuania (+7.5%) and Slovakia (7.0%). The lowest increases were observed in Luxembourg (+0.5%), Finland (+0.7%) and the Netherlands (+0.8%). Decreases were registered only in Malta (-4.7%), Cyprus (-2.7%) and Ireland (-2.7%).

Last year, the average hourly labour cost was €28.5 in the EU and €32.3 in the euro area, compared to €27.7 and €31.4 respectively in 2019.

The differences among the countries were huge, with the hourly labour costs in Bulgaria being seven times lower than those in Luxembourg.

The lowest hourly labour costs in the EU were recorded in Bulgaria (€6.5), Romania (€8) and  Hungary (€9.9). They were followed by Lithuania (€10.1), Latvia (€10.5), Croatia (€10.8) and Poland (€11).

Among the euro area countries, the lowest hourly labour costs were registered in Slovakia (€13.4), Estonia (€13.6) and Portugal (€15.3). In Slovenia and Spain these costs were around €20, while in Germany, the Netherlands and Austria they ranged between €30 and €40. The highest hourly labour costs were reported in Denmark (€45.8), Luxembourg (€42.1) and Belgium (€41.4).

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ZAGREB, Sept 15, 2020  - Croatia and Malta are the two EU countries that saw the weakest growth of hourly labor costs in the second quarter of this year, many times lower than the EU average, which was supported by a strong increase in wage costs, shows a report from the EU's statistical office Eurostat.

In the EU27, working day-adjusted hourly labor costs grew by 4.1% in Q2 compared to the same period of last year. In Q4 2019, they grew by 3.9%.

In the euro area, hourly labor costs in Q2 grew by 4.2%, after a 3.7% increase in the previous three months.

Wage costs in both the EU and the euro area grew more strongly than in Q1 despite measures introduced to contain the coronavirus. In the EU they grew by 5.3%, after a 4.1% increase in Q1, while in the euro area they rose by 5.2%, after a 3.9% increase in Q1.

In both the EU and the euro area, the increase in hourly wage costs indicates that the decrease in the number of hours worked, due to the COVID-19 crisis, was not fully compensated by a matching decrease in wages, says Eurostat.

This increase in hourly wage costs was partly compensated by the moderate increase in the non-wage component, due to tax reliefs and subsidies introduced by EU governments to support enterprises affected by the crisis.

Hourly labor costs in the EU grew the most in the services sector, by 4.3%, followed by industry and construction, where they grew by 3.9% and 2.3% respectively.

In the euro area, the services sector saw the strongest increase in total labor costs, of 4.4%, followed by industry, with an increase of 3.8%, and construction, with a 2.8% increase.

Labor costs grow least in Malta, Croatia

Of the EU countries for which data was available, Romania saw the strongest increase in hourly labor costs in Q2, of 16.1%, almost twice as high as in Q1.

Croatia and Malta saw the weakest growth in hourly labor costs, of 0.7% and 0.8% respectively. In Q1 hourly labor costs in Croatia grew by 0.6%.

Wage costs in Croatia grew by 1.5% n the period from April to June, almost the same rate as in Q1. The cost of contributions dropped by 3.9%, after a 4.2% decline in Q1.

The largest drop in hourly labor costs in the EU in Q2 was reported by Cyprus, of 8.6%, followed by Ireland, with a drop of 3.3%.

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