Press release No. 342 of 8 September 2020
Labour costs per hour worked, 2nd quarter of 2020
+1.9% on the previous quarter (seasonally and calendar adjusted)
+5.1% on the same quarter a year earlier (calendar adjusted)
WIESBADEN - Labour costs per hour worked in Germany were up a seasonally and calendar adjusted 1.9% in the second quarter of 2020 compared with the first quarter of the year. The Federal Statistical Office (Destatis) also reports that the labour cost index increased by a total of 4.3% on the fourth quarter of 2019, that is the quarter before restrictions were imposed due to the coronavirus pandemic in Germany. A large part of this increase (+2.3%) was recorded already in the first quarter of 2020, however, it continued in a similar manner in the second quarter of the year. Compared with the same quarter a year earlier, labour costs were up 5.1% in calendar adjusted terms. This is the highest year-on-year increase since the beginning of the labour cost index in 1996.
Strong increase due to smaller number of working hours
The increase was above all due to the fact that, in the index, the costs borne by employers are compared with the number of hours actually worked by employees. Due to holidays, illness or a reduction in overtime, the latter may be markedly lower than the number of hours paid. In such a case, labour costs per hour worked will be up, whereas total labour costs will not increase. From the first quarter of 2020, the number of holidays increased in particular. This coincided with the beginning of the restrictions on public life owing to the coronavirus pandemic. Child day care centres and other care facilities were temporarily closed or open to a limited extent, while many businesses were shut, too. The number of holidays remained high in the second quarter of 2020.
Increase in both gross earnings and non-wage costs
Labour costs consist of gross earnings and non-wage costs. In calendar adjusted terms, the costs of gross earnings in the second quarter of 2020 rose by 4.9% year on year, while non-wage costs were up 5.7%.
For an international comparison with the other Member States of the European Union (EU), data are currently available for the first quarter of 2020. The comparison is based on industry and the support services sector. Among others, the public service and the health sector are not included here.
In the first quarter of 2020, the price of one hour worked in Germany rose by 3.4% in calendar adjusted terms compared with the same quarter a year earlier. In the entire EU, the increase in labour costs also averaged 3.4% in that period. The highest growth rates within the EU were recorded in Lithuania (+11.2%), Romania (+9.5%) and Bulgaria (+9.1%). The rise in labour costs was lowest in Luxembourg (+0.1%), and in Croatia labour costs even decreased (-1.1%). In our neighbouring country France, the increase in labour costs (+0.7%) was markedly lower than in Germany.
Methodological notes
The differing comparative periods must be taken into account in all press releases on short-term indicators. Short-term economic monitoring focuses on comparisons with the previous month or previous quarter. These reflect short-term economic trends. A comparison with the previous year is intended to offer a long-term comparison of levels and is not subject to seasonal fluctuations. During the current coronavirus crisis, the strong decreases especially in March/April 2020 and the slowly emerging recovery have produced highly different results for the comparison with the previous month/previous quarter and the comparison with the previous year. Both of the two perspectives are important: what is the short-term economic trend compared with the previous month/previous quarter, and how far has the catching-up process gone compared with the previous year’s level? In order to provide also a direct comparison with the pre-crisis level, all press releases on short-term indicators available in seasonally adjusted form now include a comparison with February 2020 or the 4th quarter of 2019.
Revisions in the data sources used for calculating the labour cost index led to adjustments of the growth rates of the labour cost index. For instance, the calendar adjusted year-on-year rate of increase in the labour cost index was revised upwards from 4.3% to 4.7% for the first quarter of 2020.
The rates of labour cost change in countries outside the euro area are measured in the relevant national currency and, consequently, are not currency adjusted.
| Year, quarter | Index of labour costs, total | Index of gross earnings | Index of non-wage costs | |
|---|---|---|---|---|
| 1 Calendar-adjusted, X-13-JDEMETRA+. 2 Calendar and seasonally adjusted, X-13-JDEMETRA+. | ||||
| Change on the previous year in % 1 | ||||
| 2011 | 2.7 | 2.8 | 2.5 | |
| 2012 | 3.1 | 3.4 | 2.1 | |
| 2013 | 0.8 | 1.4 | -0.9 | |
| 2014 | 2.5 | 2.2 | 3.5 | |
| 2015 | 2.9 | 2.7 | 3.3 | |
| 2016 | 2.3 | 2.2 | 2.5 | |
| 2017 | 2.7 | 2.5 | 3.5 | |
| 2018 | 2.5 | 2.7 | 1.8 | |
| 2019 | 2.8 | 3.0 | 2.2 | |
| Change on the same quarter a year earlier in % 1 | ||||
| 2018 | 1st quarter | 2.5 | 2.5 | 2.3 |
| 2nd quarter | 2.3 | 2.4 | 2.2 | |
| 3rd quarter | 3.0 | 3.3 | 2.1 | |
| 4th quarter | 2.2 | 2.7 | 0.5 | |
| 2019 | 1st quarter | 1.9 | 2.4 | 0.6 |
| 2nd quarter | 3.6 | 3.8 | 2.9 | |
| 3rd quarter | 2.8 | 3.0 | 1.8 | |
| 4th quarter | 3.0 | 2.9 | 3.2 | |
| 2020 | 1st quarter | 4.7 | 4.9 | 3.8 |
| 2nd quarter | 5.1 | 4.9 | 5.7 | |
| Change on the previous quarter in % 2 | ||||
| 2018 | 1st quarter | 1.1 | 1.0 | 1.5 |
| 2nd quarter | -0.1 | 0.2 | -1.2 | |
| 3rd quarter | 1.3 | 1.3 | 1.2 | |
| 4th quarter | 0.1 | 0.3 | -0.8 | |
| 2019 | 1st quarter | 0.7 | 0.6 | 1.2 |
| 2nd quarter | 1.6 | 1.6 | 1.3 | |
| 3rd quarter | 0.4 | 0.5 | 0.1 | |
| 4th quarter | 0.3 | 0.2 | 0.8 | |
| 2020 | 1st quarter | 2.3 | 2.5 | 1.4 |
| 2nd quarter | 1.9 | 1.6 | 3.2 | |
| Member States of the European Union | Change in 1st quarter of 2020 on 1st quarter of 2019 1 | Year 2019 2 | ||
|---|---|---|---|---|
| Index of labour costs, total | Index of gross earnings | Index of non-wage costs | Labour costs per hour worked | |
| in % 3 | EUR | |||
| 1 Source: Eurostat Online Database of 24 June 2020 and calculations by Destatis. 2 Source: Eurostat Online Database of 31 March 2020 and calculations by Destatis. 3 Calendar adjusted applying national methods. | ||||
| European Union | 3.4 | 3.4 | 3.5 | 27.50 |
| Euro currency area | 3.1 | 3.1 | 3.3 | 31.30 |
| Belgium | 1.9 | 1.9 | 1.9 | 40.80 |
| Bulgaria | 9.1 | 9.1 | 9.1 | 6.00 |
| Denmark | 2.3 | 2.5 | 1.7 | 46.00 |
| Germany | 3.4 | 3.8 | 1.9 | 35.90 |
| Estonia | 3.8 | 3.8 | 3.9 | 13.50 |
| Finland | 1.0 | 1.1 | 0.6 | 34.80 |
| France | 0.7 | 0.5 | 1.2 | 37.30 |
| Greece | 1.4 | 1.4 | 1.2 | 16.60 |
| Ireland | 2.6 | 2.9 | 0.7 | 31.60 |
| Italy | 4.9 | 4.8 | 5.3 | 27.90 |
| Croatia | -1.1 | -0.3 | -6.2 | 11.10 |
| Latvia | 5.3 | 5.9 | 3.1 | 10.40 |
| Lithuania | 11.2 | 11.8 | 2.2 | 9.50 |
| Luxembourg | 0.1 | 0.0 | 1.8 | 41.40 |
| Malta | 0.3 | 0.1 | 3.5 | 14.20 |
| Netherlands | 4.9 | 4.2 | 7.9 | 35.30 |
| Austria | 9.2 | 9.1 | 9.3 | 35.00 |
| Poland | 8.7 | 8.7 | 8.7 | 10.40 |
| Portugal | 6.2 | 5.9 | 7.7 | 13.70 |
| Romania | 9.5 | 9.4 | 12.0 | 7.30 |
| Sweden | 2.8 | 2.7 | 2.8 | 39.00 |
| Slovakia | 8.6 | 8.7 | 8.3 | 12.70 |
| Slovenia | 4.3 | 4.8 | 1.3 | 19.20 |
| Spain | 3.5 | 3.6 | 3.2 | 21.40 |
| Czech Republic | 6.7 | 6.8 | 6.6 | 13.60 |
| Hungary | 8.8 | 9.7 | 4.3 | 10.70 |
| Cyprus | 4.6 | 3.6 | 10.5 | 15.30 |
Detailed data and time series relating to the labour cost indices by branch of economic activity are available in table 62421-0001 of the GENESIS-Online database.
Data for European comparisons are available under Europe in Figures.
