Labour Cost Index

Note: The effects of the corona pandemic led to reactions on the labour market in most industries, such as company closures, short-time work, recommendations to reduce overtime and vacation time and other appropriate measures. These actions mostly change the labour costs per hour worked, but they are partly difficult to measure. The short-time working allowance from the labour market service to entrepreneurs in the services sector (sections G to S of ÖNACE 2008) is currently not available, so only the manufacturing sector (sections B-F of ÖNACE 2008) could be calculated and published in the current quarter. In the services sector, the index values were calculated and published up to the first quarter of 2020.

In the second quarter of 2020, the preliminary working-day adjusted Labour Cost Index (LCI) for the manufacturing sector (sections B to S of ÖNACE 2008) rose by 11.4% compared to the previous year’s figure. The growth in gross wages and salaries per hour worked was 11.0% and the indirect labour costs per hour worked went up by 12.7%. In the first quarter of 2020, the LCI in the manufacturing sector grew by 6.0%. These extraordinary increases in labour costs per hour worked were primarily caused by the sharp decline in hours worked.

Info: Developments of the first and second quarter are provisional and may be revised with the publication of the next quarter. In addition, each third quarter, the index values are revised up to the first quarter of the previous year due to the availability of final data.

Manufacturing sector +11.4% (sections B to F of ÖNACE 2008)

In the manufacturing sector the labour costs per hour worked changed between 4.0% and 13.0%. The decline in the number of hours worked by employees was felt most by entrepreneurs in section C - manufacturing, where the LCI grew by 13.0% (+12.4% wages and salaries, +14.5% indirect labour costs). Another sharp reduction in hours worked resulted in an increase in the index of 8.2% for F – construction. In the other sections, comparatively low rates of change were recorded relative to the same quarter of the previous year: E - water supply and waste management by 6.1%, D – electricity, gas, steam and air conditioning supply by 4.7% and B – mining and quarrying by 4.0%.

Index excluding bonuses

In the manufacturing sector the working day adjusted index excluding bonuses grew by 8.7% compared to the previous year’s quarter. Thus, it increased less strong than the index including bonuses (+11.4%).

Info: Bonuses are defined as payments which are not paid in every remuneration period (e.g. 13th and 14th monthly pays, exceptional length-of-service awards) and voluntary severance pays (e.g. golden handshakes).

Results of the labour cost index in the EU member states and other participating countries (currently Norway and Turkey) are published by Eurostat in a publicly available database (‘Labour costs’ > ‘Labour cost index’ > ‘Labour cost index by NACE Rev. 2 activity - nominal value, quarterly data (lc_lci_r2_q)’).

Please consult our German website for tables containing further information.

Results (overview): Labour Cost Index (working-day adjusted), whole economy (ÖNACE 2008 sections B to S)

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