OECD Unit Labour Cost growth picks up to 0.5% in the fourth quarter of 2015 and on EU wages

OECD Unit Labour Cost growth picks up to 0.5% in the fourth quarter of 2015 and an overview of EU wages

Growth in unit labour costs (ULCs) in the OECD area accelerated to 0.5% in the fourth quarter of 2015 (compared with 0.2% in the previous quarter), the highest rate since the first quarter of 2014. Compensation costs rose by 0.5%, while labour productivity growth was flat.

Labour unit cost 1

ULC growth picked up in the United States in the fourth quarter (0.6 %, compared with 0.3 % in the previous quarter), as labour productivity marginally decreased (minus 0.1 %) and compensation costs rose (by 0.5 %). ULCs also rose by 0.6 % in Canada (compared with a decline of 0.2 % in the previous quarter), with the increase fully accounted for by growth in compensation costs. ULCs grew by 0.4% in Japan in the fourth quarter (the same rate as in the previous quarter), reflecting a decrease in labour productivity (minus 0.3 %) and flat compensation costs.

In the United Kingdom, ULC growth slowed to 0.2 %, as labour productivity surged (1.5 %, compared with minus 0.1 % in the previous quarter), almost entirely offsetting robust growth in compensation costs (1.7 %, compared with 0.2 % in the previous quarter).

In the Euro area, ULC growth accelerated to 0.5 % (compared with 0.2 % in the previous quarter), with labour productivity unchanged for the third straight quarter.

Labour unit cost  per employee

Within the Euro area, the adjustment process remains mixed. ULCs grew marginally in France and Italy (0.2 %) and picked up strongly in Germany (up 1.0 %, compared with 0.5 % in the previous quarter). ULC growth also accelerated in Portugal (up 0.3 %, compared with a fall of 1.6 % in the third quarter) and Spain (up 0.5 %, after falls of 0.2 % in the second and third quarters). ULCs fell in Belgium for the fourth consecutive quarter, while they were unchanged in Greece.


The hourly wages  2015 in the EU

Hourly labour costs ranged from EUR 4.1 to  EUR 41.3 across the EU Member States in 2015 and the lowest were reported in Bulgaria and Romania, the highest in Denmark and Belgium

In 2015, average hourly labour costs in the whole economy (excluding agriculture and public administration) were estimated to be EUR 25.0 in the European Union (EU) and EUR 29.5 in the euro area. However, this average masks significant gaps between EU Member States, with the lowest hourly labour costs recorded in Bulgaria (EUR 4.1), Romania (EUR 5.0), Lithuania (EUR 6.8), Latvia (EUR 7.1) and Hungary (EUR 7.5), and the highest in Denmark (EUR 41.3), Belgium (EUR 39.1), Sweden (EUR 37.4), Luxembourg (EUR 36.2) and France (EUR 35.1).

In industry, labour costs per hour were EUR 25.9 in the EU and EUR 32.3 in the Euro Area, in services EUR 24.9 and EUR 28.6 respectively and in construction EUR 22.4 and EUR 25.8. In the mainly non-business economy (excluding public administration), labour costs per hour were EUR 25.1 in the EU and EUR 29.4 in the euro area in 2015.

Labour costs are made up of wages and salaries and non-wage costs such as employers’ social contributions. The share of non-wage costs in the whole economy was 24.0 % in the EU and 26.0 % in the euro area, ranging from 6.6 % in Malta to 33.2 % in France.

These estimates for 2015 come from an article issued by Eurostat, the statistical office of the European Union. Data cover enterprises with 10 or more employees and are based on the Labour Cost Survey data for 2012, which are extrapolated through the Labour Cost Index.




Between 2014 and 2015, hourly labour costs in the whole economy expressed in EUR rose by 2.0 % in the EU and by 1.5 % in the euro area.

Within the euro area, the largest increases were recorded in Latvia (+7.3 %), Lithuania (+5.6 %) and Estonia (+5.3 %). Decreases were observed in Cyprus (-1.0 %) and Italy (-0.5 %).

For Member States outside the euro area in 2015, and expressed in national currency, the largest increases in hourly labour costs in the whole economy between 2014 and 2015 were registered in Romania (+8.3 %) and Bulgaria (+7.0 %), and the smallest in Denmark and Croatia (both +1.7 %). When comparing labour cost estimates in EUR over time, it should be noted that data for those Member States outside the euro area are influenced by exchange rate movements.


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