Hourly labour costs in the Euro Area went up 2.5 percent year-on-year in the third quarter of 2018, following an upwardly revised 2.3 percent increase in the previous period. This was the steepest annual gain in labour costs since the second quarter of 2011, as wages & salaries rose at a faster 2.4 percent, compared to 2.1 percent in the previous three-month period. Meanwhile, the non-wage component advanced 3 percent, the same pace as in the second quarter. By economic activity, hourly labour costs rose by 2.2 percent in industry, by 2.9 percent in construction and in services and by 2.1 percent in the (mainly) non-business economy. Among Eurozone's largest economies, labour cost growth picked up in Germany (2.7 percent vs 2.1 percent) and Spain (2.8 percent vs 0.8 percent), but slowed in France (2.3 percent vs 2.4 percent) and Italy (2.5 percent vs 3.9 percent). Labour Costs in the Euro Area averaged 100.60 Index Points from 2008 until 2018, reaching an all time high of 114.10 Index Points in the fourth quarter of 2017 and a record low of 85.10 Index Points in the first quarter of 2008.
Labour Costs in Euro Area is expected to be 116.40 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Labour Costs in Euro Area to stand at 105.70 in 12 months time. In the long-term, the Euro Area Labour Costs is projected to trend around 120.20 Index Points in 2020, according to our econometric models.