Total hourly labour cost in the euro area (EA13) rose at an annual rate of 2.5% in nominal terms up to the third quarter of 2007, compared with 2.4% for the previous quarter. In the EU27, the annual rise was 3.7% up to the third quarter of 2007, compared with 3.3% for the previous quarter.

The two main components of labour cost are wages & salaries and non-wage costs. In the euro area, wages & salaries grew at an annual rate of 2.5% up to the third quarter of 2007, and non-wage costs by 2.2%, compared with 2.5% and 1.8% respectively for the second quarter of 2007. In the EU27, wages & salaries rose by 3.8% and the non-wage component by 3.1%. For the previous quarter the corresponding rates were 3.5% and 2.6%.

A breakdown by economic activity shows that in the euro area hourly labour cost rose at an annual rate of 2.5% in industry, 3.0% in construction and 2.4% in services up to the third quarter of 2007. In the EU27, labour cost grew by 3.4% in industry, 5.3% in construction and 3.6% in services.

Member States

Among the Member States for which data are available for the third quarter of 2007 the smallest annual increases in hourly labour cost were observed in Germany (0.9%) and Finland (1.9%). The highest annual rises were registered in Latvia (30.0%), Romania (23.2%), Estonia (20.6%) and Lithuania (20.1%).

Annual growth in the wages & salaries component ranged from 1.5% in Germany to 29.9% in Latvia. The range for non-wage costs was from -1.0% in Germany to 28.9% in Latvia.