Total hourly labour costs in the euro area (EA13) rose by 2.7% in nominal terms in the year up to the fourth quarter of 2007, compared with 2.5% for the previous quarter. In the EU27, the annual rise was 3.5% up to the fourth quarter of 2007, compared with 3.7% for the previous quarter.

The two main components of labour costs are wages & salaries and non-wage costs. In the euro area, wages & salaries grew by 2.9% in the year up to the fourth quarter of 2007, and non-wage costs by 2.2%, compared with 2.6% and 2.3% respectively for the third quarter of 2007. In the EU27, wages & salaries rose by 3.7% and the non-wage component by 2.9%. For the previous quarter the corresponding rates were 3.9% and 3.2%.

A breakdown by economic activity shows that in the euro area hourly labour costs rose at an annual rate of 2.8% in industry, 3.7% in construction and 2.5% in services up to the fourth quarter of 2007. In the EU27, labour costs grew by 3.7% in industry, 5.3% in construction and 3.2% in services.

Member States

Among the Member States for which data are available for the fourth quarter of 2007 the smallest annual increases in hourly labour costs were observed in Luxembourg (1.0%) and Germany (1.5%). The highest annual rises were registered in Latvia (30.1%), Romania (21.6%), Estonia (20.7%) and Lithuania (20.5%).

Annual growth in the wages & salaries component ranged from 2.0% in Germany to 30.6% in Latvia. The range for non-wage costs was from -0.5% in Slovenia to 28.5% in Latvia.