Labour cost index

The labour cost index calculated by the Federal Statistical Office is an indicator for the quarterly measurement of labour cost trends in Germany. It provides current information on how the cost situation of businesses is developing. It thus contributes to assessing Germany's international competitiveness in terms of production site locations. Also, it indicates risks to consumer price stability that may arise from cost increases for producers.

The labour cost index is based on the aggregate "labour costs per hour worked". It reflects the quarterly trend of total labour costs for all employees and offers two ways of breakdown: First, the labour cost development can be shown in a breakdown by individual economic branches. For all NACE sections of industry and service sector comparable and harmonized results are available retrospective to the 1st quater 1996. Second, the index allows to break down the labour cost trend by the two main components of labour costs, that is the index of wages and salaries and the index of non-wage costs.

The labour cost index has been ordered by two EU regulations. The member states are thus obliged to provide quarterly data for the labour cost index in a comparable form. Consequently, the labour cost index in Europe has a sound methodological basis, so that consistent comparative figures can be presented for the first time.

The German results are published quarterly. 70 days after the end of the quarter. Eurostat, the Statistical Office of the European Communities, envisages publication of European results 75 days after the end of the reference quarter.