In the 4th quarter of 2017, hourly labour costs grew by 7.3 %

16.03.2018

Seasonally non-adjusted data of the Central Statistical Bureau (CSB) show that, compared to the 4th quarter of 2016, in the 4th quarter of 2017 hourly labour costs rose by 54 cents or 7.3 %, reaching EUR 8.02. Seasonally adjusted data show identical changes – rise of 7.3 %.

Changes in hourly labour costs
(as per cent,compared to the corresponding quarter of previous year)

Seasonally non-adjusted data show that, compared to the 4th quarter of 2016, in the 4th quarter of 2017 hourly labour costs increased in almost all sectors, except for other service activities (activities of public, political and other organisations, repair of computers and personal and household goods, washing and (dry-)cleaning, hairdressing and other beauty treatment, funeral and related activities) where a decline of 10.3 % was recorded. The sharpest rise in hourly labour costs was recorded in water supply; sewerage, waste management and remediation activities (of 11.0 %), professional, scientific and technical activities (legal activities, accounting, bookkeeping and auditing activities, advertising and market research, architectural and engineering activities, business and other management consultancy activities, architectural and engineering activities, scientific research and development, etc.) (10.8 %), energy sector as well as  accommodation and food service activities (10.4 % in each), and public administration and defence, compulsory social security (10.0 %).

Hourly labour costs are influenced not only by changes in wages, salaries and other labour costs, but also by fluctuations in number of hours worked over the year. In all sectors indicating sharper hourly labour cost rise in the 4th quarter of 2017, greater influence was exerted by the increase in regular wages and salaries and decline in the number of hours worked. Compared to the 4th quarter of 2016, in the 4th quarter of previous year there were less working days, moreover number of hours worked reduced also because of the dismissed employees (slight increase – of 0.8 % – in the employee number was recorded only in public administration and defence). Sharp rise in water supply; sewerage, waste management and remediation activities, as well as energy sector was also affected by the growth of employers’ voluntary social security contributions (additional pension insurance contributions, health and life insurance contributions, etc.) and compensations and benefits paid to the redundant workers.

The lowest increase in hourly labour costs was registered in real estate activities and administrative and support service activities – of 1.6 % and 2.1 %, respectively. In these sectors, upturn was observed in both wages and salaries and hours worked. In its turn, the sharp indicator decline in other service activities was affected by the decline of wage and salary fund along with the dismissed employees, whereas the number of hours worked went up.

In the 4th quarter of 2017, the highest hourly labour costs were registered in financial and insurance activities sector (EUR 16.37), information and communication (EUR 12.79), energy sector (EUR 11.86), public administration and defence (EUR 10.68), and mining and quarrying (EUR 9.98). In its turn, the lowest hourly labour costs were recorded in other service activities (EUR 5.39), accommodation and food service activities (EUR 5.30), real estate activities (EUR 6.53), arts, entertainment and recreation (EUR 6.57), administrative and support service activities (EUR 6.77), as well as education (EUR 6.61).

Hourly labour costs by main kind of economic activity
(seasonally non-adjusted data, EUR)

 

Hourly labour costs

of which wages and salaries

Q4 2016

Q4 2017

changes, %

Q4 2016

Q4 2017

changes, %

Total (B–S)

7.47

8.02

7.3

5.95

6.38

7.3

Mining and quarrying (B)

9.44

9.98

5.8

7.56

7.97

5.4

Manufacturing (C)

7.15

7.75

8.3

5.69

6.17

8.5

Electricity, gas, steam and air conditioning supply (D)

10.74

11.86

10.4

7.60

8.04

5.7

Water supply; sewerage, waste management and remediation activities (E)

7.17

7.96

11.0

5.69

6.21

9.0

Construction (F)

7.19

7.61

5.8

5.83

6.19

6.1

Wholesale, retail sale; repair of motor vehicles and motorcycles (G)

6.61

7.12

7.9

5.28

5.71

8.0

Transportation and storage (H)

7.68

8.07

5.0

6.08

6.39

5.2

Accommodation and food service activities (I)

4.98

5.50

10.4

4.01

4.43

10.4

Information and communication (J)

11.90

12.79

7.5

9.45

10.23

8.3

Financial and insurance activities (K)

15.35

16.37

6.6

11.78

12.46

5.8

Real estate activities (L)

6.43

6.53

1.6

5.17

5.28

2.2

Professional, scientific and technical activities (M)

7.90

8.75

10.8

6.55

7.29

11.3

Administrative and support service activities (N)

6.63

6.77

2.1

5.37

5.51

2.6

Public administration and defence; compulsory social security (O)

9.71

10.68

10.0

7.64

8.40

9.9

Education (P)

6.18

6.61

6.9

4.97

5.29

6.4

Human health and social work activities (Q)

6.65

7.13

7.2

5.31

5.72

7.6

Arts, entertainment and recreation (R)

6.05

6.57

8.5

4.87

5.32

9.3

Other service activities (S)

6.01

5.39

-10.3

4.97

4.46

-10.2


More information on Latvian labour costs is available in the CSB database section Labour Costs – Key Indicators. Statistics on labour costs in the 4th quarter of 2017 is published in the database section Labour Costs – Short term statistical data.

 

Methodological explanations

Labour costs include gross wages and salaries and other labour costs. Hourly labour costs are calculated by dividing the sum of labour costs by the number of hours worked.

Wages and salaries are regular and irregular direct wages and salaries – basic salary (monthly, wage), payment for the time worked or job completed, regular and irregular premiums and bonuses, payments for days not worked (vacation and other days not worked), state mandatory social insurance contributions paid by the employees, and personal income tax. In line with the regulatory enactment of the European Union (EU), when compiling data on labour costs, wages and salaries include remuneration in kind (goods and services provided by the employer to employees free of charge or at a lower price, living quarters, mobile telephone, transport compensation etc.).  Other labour costs include statutory social security contributions payable by the employer, employers’ contractual and voluntary social security contributions (additional pension insurance contributions, health and life insurance contributions etc.), support payments from the employer, awards, gifts, payments for sick list A, severance pay, entrepreneurship state risk duty.

According to the EU regulatory enactments, hourly labour costs and changes thereof are calculated for sectors B–S of the NACE Rev. 2.

Indicator changes have been calculated from not rounded values.

 

Media requests:
Communication Section
E-mail: media [at] csb [dot] gov [dot] lv
Phone: +371 67366621, +371 27880666
 

More information on data:
Ilze Rutka
Wage Statistics Section
E-mail: Ilze [dot] Rutka [at] csb [dot] gov [dot] lv
Phone: +371 67366925