Economy: Employers’ labour costs across most of the EU have risen, while the number of jobs has declined in 11 out of the 17 euro zone countries.
The cost of employing someone in Luxembourg and across much of Europe has risen at the same time that most of the EU has seen a fall in the number of jobs, two new reports from the EU’s official statistics agency have shown.
The Grand Duchy saw the 10th highest growth in nominal labour costs during the first quarter of 2013 among EU nations, compared the same period the year before. The hourly figure rose 4.6%, Eurostat said on Monday.
That compares to 3.9% in Germany, 2.6% in Belgium, and 0.1% in France, with 1.9% in the wider EU27, and 1.6% across the entire euro area and in the UK.
The largest increases in the statistics bureau’s “Labour Cost Index” during the first quarter were recorded in Romania (8.6%), Estonia (7.5%), Slovakia (5.5%) and the Czech Republic (5.4%), while declines were seen in Slovenia (-3.8%), Spain (-0.7%), Cyprus (-0.5%) and Portugal (-0.3%).
In Luxembourg the rise in nominal hourly labour costs varied by wide margins between branches of the economy, according to Eurostat. In the “non-business economy” which includes the public sector, health care, the arts and NGOs, the total rose 2.9% between the first quarters of 2012 and 2013.
The same 2.9% figure was recorded in the “industry” category which encompasses mining, manufacturing and utilities, although non-wage costs gained 5.1%.
In the services sector, overall costs were up by 5.5%, with wages rising 6.0%.
In construction, the figure rose by 5.3%, largely driven by an 8.4% increase in non-wage costs.
Eurostat’s Labour Cost Index is calculated by dividing labour cost by the number of hours worked. Labour cost reflects salaries, bonuses and benefits, while non-wage costs include employers’ social contributions and employment taxes, minus any subsidies.
Largest job growth in Greater Region
The labour cost report followed news that Luxembourg had experienced the 5th highest job growth in the EU and 3rd highest in the euro area.
On Friday Eurostat reported that the number of people employed in the Grand Duchy increased 1.6% between the first quarters of 2012 and 2013.
Relative job increases had averaged more than 2.1% during most of last year.
Nevertheless Luxembourg’s figure represented by far the strongest gains in the Greater Region. Seasonally adjusted employment grew 0.7% in Germany, while it shrank in Belgium (-0.2%) and in France (-0.3%) during the same period.
There were 1.0% fewer people working in the 17-country euro zone and 0.4% fewer in the EU27.
The largest increases in the EU were recorded in Latvia (4.8%), Romania (3.0%), Estonia (2.3%). Other countries gaining jobs included Ireland (1.1%), the UK (1.4%) and Malta (1.8%), the Eurostat figures revealed.
The biggest decreases were seen in Greece (-6.5%), Portugal (-5.2%), Spain (-4.3%) and Cyprus (-4.8%). Other member states experiencing declines between the first quarters of 2012 and 2013 included Italy (-1.4%), Finland (-0.9%) and Denmark (-0.4%).