Home > Statistics > Labour cost index > 2016 > 1st quarter > Cost of an hour worked went up by 1.5 per cent in January to March year-on-year

Published: 9 June 2016

Cost of an hour worked went up by 1.5 per cent in January to March year-on-year

Private sector labour costs rose by 1.5 per cent in January to March 2016 when compared with the respective period of the year before. Seasonally adjusted labour costs went up by 0.5 per cent in January to March 2016. Labour costs without one-off pay items, such as performance-based bonuses, increased by 1.5 per cent compared to the corresponding period one year ago. Over the same period, the index of wage and salary earnings for the private sector went up by 1.3 per cent.

Year-on-year change in labour costs in the private sector from the corresponding quarter of the previous year

In the central government sector, the cost of an hour worked rose by 3.9 per cent in January to March 2016 when compared with the respective period of the year before. Labour costs without one-off pay items increased by 3.9 per cent over the same period. Seasonally adjusted labour costs went up by 1.9 per cent. Over the same period, the index of wage and salary earnings in the central government sector went up by 1.9 per cent. The rise of the cost of an hour worked in central government was mainly due to the fall in hours worked.

In the local government sector, the cost of an hour worked rose by 2.4 per cent in January to March 2016 when compared with the respective period of the year before. Labour costs without one-off pay items rose by 2.3 per cent. Over the same period, the index of wage and salary earnings in the local government sector went up by 1.0 per cent. According to the Labour Cost Index, hours worked in the local government sector went down by 4.6 per cent and wages and salaries subject to preliminary withholding tax fell by two per cent from the corresponding period of the previous year.

The first quarter of 2016 had one working day less than one year earlier.

Year-on-year change in labour costs according to TOL 2008, 1st quarter 2016

Code	Industry	Labour costs, year-on-year change
		Labour costs	Labour costs, without one-off pay items	Labour costs, seasonally adjusted
B to S	Total, private sector	1,5	1,5	0,5
B to E	Manufacturing	2,9	0,7	1,3
F	Construction	-0,8	-0,3	-0,8
G to N	Business service activities	1,5	1,4	1,4
J to R	Central government	3,9	3,9	1,9
D to S	Local government	2,4	2,3	..

The cost per an hour worked in manufacturing industries (B to E) grew by 2.9 per cent, decreased by 0.8 per cent in construction (F), and increased by 1.5 per cent in business service activities (G to N). In manufacturing industries, the decline in the number of hours worked compared to the corresponding quarter last year sped up the growth in costs. During the same period, wages and salaries subject to preliminary withholding tax contracted by nearly three per cent according to the data of the Labour Cost Index. In construction, the growth in hours worked slowed down the rise in costs while wage and salary costs went up by close on one per cent. Hours worked in business service activities went down faster than wage and salary costs.

In manufacturing industries, the highest growth in the cost of an hour worked was found in the metal industry, 3.4 per cent. The cost of an hour worked without one-off pay items rose by 2.3 per cent in the metal industry. In the forest industry, the cost went up by 3.3 per cent. The costs went down by 1.8 per cent in the food industry. Among service industries, growth was biggest in transportation and storage, 3.5 per cent. In information and communication activities, costs increased by 0.5 per cent.

The seasonally adjusted cost of an hour worked in all manufacturing (B to E) went up by 1.3 per cent in January to March 2016 compared with the corresponding period last year. In construction, the seasonally adjusted cost of an hour worked fell by 0.8 per cent and in business service activities it increased by 1.4 per cent.

In the forest industry, the seasonally adjusted cost of an hour worked went up by 2.3 per cent and in the metal industry by 3.4 per cent in the January to March period of 2016 from the same period of the previous year. In transportation and storage, costs increased by 3.4 per cent.

The Labour Cost Index measures the change in wage and salary costs calculated per hour worked. Hours actually worked refer to the working hours an employee has spent on his/her actual duties. Hours worked include Sunday and overtime work but not paid hours off work, like the hours of annual leaves, national holidays or paid sickness absences.

In the index, hours worked or the structure of personnel have not been standardised. The cost of an hour worked is calculated directly as the ratio of industry-specific wages and salaries sum and social insurance contributions to the hours worked for each quarter. The change in average labour costs is affected by changes in regular earnings, performance-based bonuses and other one-off pay components, social insurance contributions, as well as changes in the number of hours worked and the structure of the labour force.

Source: Wages, Salaries and Labour Costs, Statistics Finland

Inquiries: Pekka Haapala 029 551 3460, Annina Rouvinen 029 551 3525, Petri Ruohonen 029 551 3465, tvkindeksi@stat.fi

Director in charge: Mari Ylä-Jarkko

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Appendix tables

• Appendix table 1. Labour costs, Labour Cost Index 2012=100 (9.6.2016)
• Appendix table 2. Labour costs, percentage changes, Labour Cost Index 2012=100 (9.6.2016)
• Appendix table 3. Labour costs, excluding one-off items, Labour Cost Index 2012=100 (9.6.2016)
• Appendix table 4. Labour costs, excluding one-off items, percentage changes, Labour Cost Index 2012=100 (9.6.2016)
• Appendix table 5. Seasonally adjusted labour costs, Labour Cost Index 2012=100 (9.6.2016)
• Appendix table 6. Seasonally adjusted labour costs, percentage changes, Labour Cost Index 2012=100 (9.6.2016)
• Appendix table 7. Standard Industrial Classification 2008 (9.6.2016)

Revisions in these statistics

• Revision of data (9.6.2016)

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Updated 9.6.2016