Industry registers highest increase in labour costs

Industry registered the highest increase in labour costs in the past year, according to new information released by the EU's statistics office in Brussels yesterday. At the same time, Malta's increase in labour costs during the past 12 months has been minimal and much lower than the EU average, which helps the country's competitiveness.

Releasing its latest Labour Cost Index, Eurostat said that in September, Malta registered a slight increase of 0.4 per cent in its labour costs when compared to 12 months earlier. However, Malta's increase was one of the lowest in the EU where the cost of labour increased on average by 3.2 per cent in the eurozone in the last year.

On the other hand, the statistics revealed that while the island has managed to keep a relatively low increase in labour costs, industry suffered the biggest brunt on its wage bill with an increase of 1.8 per cent in the last 12 months, more than four times the island's average. In contrast, costs in the construction sector only increased by 0.7 per cent while the services sector registered a decrease of -0.3 per cent in labour costs.

The Labour Cost Index published regularly by the EU is a short-term indicator showing the development of hourly labour costs incurred by employers. It is calculated dividing the labour cost by the number of hours worked, therefore, the development of both variables, labour costs and hours worked, affect the evolution of the index.

All labour related costs are included in the calculations including wage and non-wage costs.

On an EU level, Eurostat said that among the member states for which data are available for the third quarter of 2009, annual decreases in hourly labour costs were observed in Lithuania (-10.9 per cent), Estonia (-4.3 per cent), Latvia (-2.7 per cent) and The Netherlands (-0.8 per cent).

The highest annual rises were registered in Bulgaria (+10.4 per cent), Romania (+9.6 per cent) and the Czech Republic (+6.4 per cent).