Romania sees EU's fastest hourly average labour cost rise in April

Romania sees EU's fastest hourly average labour cost rise in April
By bne IntelliNews June 18, 2018

Romania’s 12.7% (nominal) rise of the hourly average labour cost in April was the highest in Europe, Eurostat said. However, the convergence to European Union averages remains slow.

The sharp growth of the labour cost in Romania announced by Eurostat was offset by the highest inflation in Europe as well (4.7% y/y). Furthermore, the labour cost itself remains at very low levels compared to Europe’s average: it was roughly one quarter (25%) of the average EU28 labour cost, or some €7 per hour including wages and all the other labour-related expenses.

Romania's hourly labour cost rose by 12.7% y/y in the first quarter of the year, data from the country’s statistics office showed on June 4. Compared to the previous quarter, costs went up by 1.4%. 

In the public sector, where the government made notable wage hikes last year and in H1 2018, the hourly labour cost increased at double digit rates: in education (23.57% y/y), in public administration (+18.59%) and in health and social assistance (+14.01%). 

Workforce scarcity (driven by low wages compared to EU averages) prompted double digit rising labour cost in the private sector as well: in construction (+19%), in information and communication (13.91%), in accommodation and food service activities (13.30%) and in real estate activities (13.10%).

Earlier this month, Eurostat reported that Romania had the highest quarterly employment growth in the EU in the first quarter of the year.