Hourly labour costs in the Euro Area went up 2.2 percent year-on-year in the second quarter of 2018, compared to an upwardly revised 2.1 percent increase in the previous period and beating market expectations of a 1.7 percent gain. It was the highest rate since the fourth quarter of 2012, as the non-wage component advanced 2.9 percent, up from a 2.8 percent rise in Q1 and salaries per hour worked were up 1.9 percent, after increasing 1.8 percent in the previous period. By economic activity, labour costs went up in industry (2.2%); construction (2.7%); services (2.5%) and in the (mainly) non-business economy (1.5%). Among the Member States, labour costs growth picked up mainly in France (2.4% from 1.7%); Greece (5.0% from 4.4%) while eased in Germany (2.0% vs 2.4%); Spain (0.7% vs 1.4%) and Austria (2.1% vs 4.0%). Labour Costs in the Euro Area averaged 100.44 Index Points from 2008 until 2018, reaching an all time high of 114 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 105.10 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 112.50 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.