Home > Statistics > Labour cost index > 2018 > 4th quarter > Cost of an hour worked increased by 1.2 per cent in October to December year-on-year

Published: 8 March 2019

Cost of an hour worked increased by 1.2 per cent in October to December year-on-year

Private sector labour costs increased by 1.2 per cent in October to December 2018 when compared with the respective period of the year before. Seasonally adjusted labour costs went up by 1.2 per cent in October to December 2018.

In the private sector, labour costs without one-off pay items, such as performance-based bonuses, increased by 1.6 per cent in October to December 2018 compared to the corresponding quarter one year ago. Over the same period, the index of wage and salary earnings for the private sector went up by 2.3 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 increased by 5.7 per cent in October to December 2018 when compared with the respective period of the year before. Seasonally adjusted labour costs went up by 5.0 per cent. The rise in costs was mainly due to the growth in wages and salaries subject to preliminary withholding tax. About a third of the rise in costs was due to decline of hours worked. Over the same quarter, the index of wage and salary earnings in the central government sector went up by 2.3 per cent.

In the local government sector, the cost of an hour worked increased by 1.6 per cent in October to December 2018 when compared with the respective period of the year before. The year-on-year change in labour costs without one-off pay items increase was 1.2 per cent. Over the same period, the index of wage and salary earnings in the local government sector went up by 1.7 per cent.

Year-on-year change in labour costs according to TOL 2008 and sector, 4th quarter 2018

Code	Industry/Sector	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	1,2	1,6	1,2
B to E	Manufacturing	1,8	1,8	1,8
F	Construction	4,2	4,4	4,5
G to N	Business service activities	0,1	1,0	0,1
J to R	Central government	5,7	5,4	5,0
D to S	Local government	1,6	1,2	..

The cost per an hour worked went up by 1.8 per cent in manufacturing industries (B to E), by 4.2 per cent in construction (F) and by 0.1 per cent in business service activities (G to N) in July to September 2018.

In manufacturing industries in the fourth quarter of 2018, there was a rise of 1.8 per cent in the forest industry. In the food industry costs went up by 2.3 per cent and in the chemical industry labour costs went up 1.1 per cent respectively. Among service industries, the biggest rise in costs, 2.1 per cent, was in wholesale and trade. In information and communication activities, costs decreased by 4.8 per cent.

The seasonally adjusted cost of an hour worked in all manufacturing (B to E) went up by 1.8 per cent in October to December 2018 compared with the corresponding period last year. In construction (F), the seasonally adjusted cost of an hour worked increased by 4.5 per cent and in business service activities (G to N) increased by 0.1 per cent.

In manufacturing industries seasonally adjusted cost of an hour worked went up by 2.5 per cent in the forest industry and in chemical industry labour costs went up 1.4 per cent in the October to December period of 2018 from the same period of the previous year. In business service activities, seasonally adjusted costs rose by 2.2 per cent in trade and by 0.7 per cent in transportation and storage. In information and communication there was a 4.7 per cent decrease in the seasonally adjusted costs.

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, Tanja Jumisko 029 551 3695, Olli Ruuska 029 551 3274, 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 (8.3.2019)
• Appendix table 2. Labour costs, percentage changes, Labour Cost Index 2012=100 (8.3.2019)
• Appendix table 3. Labour costs, excluding one-off items, Labour Cost Index 2012=100 (8.3.2019)
• Appendix table 4. Labour costs, excluding one-off items, percentage changes, Labour Cost Index 2012=100 (8.3.2019)
• Appendix table 5. Seasonally adjusted labour costs, Labour Cost Index 2012=100 (8.3.2019)
• Appendix table 6. Seasonally adjusted labour costs, percentage changes, Labour Cost Index 2012=100 (8.3.2019)
• Appendix table 7. Standard Industrial Classification 2008 (8.3.2019)

Revisions in these statistics

• Revision of data (8.3.2019)

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Updated 8.3.2019