Euro Area Labor Costs | MTS Insights

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Euro area hourly labor costs rose 3.4% YoY in Q1 2025, down from 3.8% YoY in Q4 2024 and the lowest since Q3 2022.
- Wage growth slowed to 3.4% YoY, down from 4.1% YoY in the previous quarter and the weakest since Q3 2022.
- The non-wage component of labor costs increased 3.4% YoY, up from 2.7% YoY previously.
- By sector in the euro area, labor costs increased 4.7% YoY (prev 4.2% YoY) in construction, 4.3% (prev 3.8% YoY) in services, and 2.5% (prev 4.2% YoY) in industry.
- Professional, scientific & technical activities saw the largest wage (+7.4%) and non-wage (+6.2%) increases.
- Romania (+16.1% YoY), Croatia (+13.5%), and Bulgaria (+13.0%) recorded the highest national wage growth; Malta (+1.6%) and France (+1.9%) had the lowest.
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Euro area hourly labor costs rose 3.7% YoY in Q4 2024, down from 4.5% YoY in Q3 2024.
- In the euro area, wages rose 4.1% YoY and non-wage costs rose 2.6%; in the EU, wages rose 4.7% YoY and non-wage costs rose 3.0%.
- Sector-wise, euro area labor costs rose 4.3% YoY in industry, 4.0% in construction, and 3.7% in services.
- In the EU, labor costs rose 4.9% YoY in industry, 4.5% in construction, and 4.2% in services.
- Mining & quarrying saw the highest wage and non-wage cost growth (+6.8% and +7.1% YoY, respectively).
- Croatia (+13.9% YoY), Poland (+13.8%), and Romania (+13.1%) recorded the strongest national wage growth, while real estate had the weakest sectoral wage growth (+2.9%).
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Euro area labor costs were up 4.6% YoY in Q3 2024, down from an upwardly revised Q2 2024 rate of 5.2% YoY (previous estimate was 4.7% YoY). Wage costs were up 4.4% YoY, down from 4.6% YoY in Q2 and 5.1% YoY a year ago. Labor costs are up around the same rate across all sectors with construction labor cost growth in a slight lead at 5.0% YoY compared to industry at 4.6% YoY and services at 4.5% YoY.

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