Home > Statistics > Labour cost index > 2017 > 1st quarter > Cost of an hour worked decreased by 3.0 per cent in January to March year-on-year

Published: 9 June 2017

Cost of an hour worked decreased by 3.0 per cent in January to March year-on-year

Private sector labour costs decreased by 3.0 per cent in January to March 2017 when compared with the respective period of the year before. Seasonally adjusted labour costs went down by 0.9 per cent in January to March 2017. The biggest reason for the drop is that there were three more working days in the first quarter of 2017 than in the corresponding period of 2016 as this year, Easter was in the second quarter and last year it was in the first quarter. In the Labour Cost Index, an increase in the number of working days has a decreasing effect on costs.

In the private sector, labour costs without one-off pay items, such as performance-based bonuses, decreased by 3.0 per cent in January to March 2017 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 0.8 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 declined by 7.5 per cent in January to March 2017 when compared with the respective period of the year before. Seasonally adjusted labour costs went down by 5.0 per cent. Labour costs without one-off pay items decreased by 7.5 per cent over the same period. Over the same quarter, the index of wage and salary earnings in the central government sector went down by 1.1 per cent.

In the local government sector, the cost of an hour worked decrease by 4.8 per cent in January to March 2017 when compared with the respective period of the year before. The year-on-year change in labour costs without one-off pay items was a fall of 5.1 per cent. Over the same period, the index of wage and salary earnings in the local government sector went down by 1.1 per cent.

In the public sector, the decline is primarily explained by the higher number of working days during the first quarter of 2017 compared to the corresponding quarter of the previous year. Also lower social insurance contributions had an effect on the decline in labour costs in the public sector.

Year-on-year change in labour costs according to TOL 2008, 1st quarter 2017

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	-3,0	-3,0	-0,9
B to E	Manufacturing	-4,4	-3,7	-0,9
F	Construction	-2,5	-2,5	-2,5
G to N	Business service activities	-2,1	-2,4	-2,0
J to R	Central government	-7,5	-7,5	-5,0
D to S	Local government	-4,8	-5,1	..

The cost per an hour worked went down by 4.4 per cent in manufacturing industries (B to E), by 2.5 per cent in construction (F), and by 2.1 per cent in business service activities (G to N) in January to March 2017.

In manufacturing industries, the biggest fall in costs of an hour worked in the first quarter was in the forest industry, 8.0 per cent. In the chemical industry, costs went down by 7.3 per cent, while in the food industry there was a rise of 1.1 per cent in labour costs. Among service industries, the fall was biggest in financial and insurance activities, 5.8 per cent. In trade, the costs went down by 0.8 per cent.

The seasonally adjusted cost of an hour worked in all manufacturing (B to E) went down by 0.9 per cent in January to March 2017 compared with the corresponding period last year. In construction, the seasonally adjusted cost of an hour worked fell by 2.5 per cent and in business service activities by 2.0 per cent.

The seasonally adjusted cost of an hour worked went down by 5.3 per cent in the forest industry and by 5.1 per cent in the metal industry in the January to March period of 2017 from the same period of the previous year. In trade, seasonally adjusted costs decreased by 0.8 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, Maija Lahtinen 029 551 3645, tvkindeksi@stat.fi

Director in charge: Reetta Moilanen

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Appendix tables

• Appendix table 1. Labour costs, Labour Cost Index 2012=100 (9.6.2017)
• Appendix table 2. Labour costs, percentage changes, Labour Cost Index 2012=100 (9.6.2017)
• Appendix table 3. Labour costs, excluding one-off items, Labour Cost Index 2012=100 (9.6.2017)
• Appendix table 4. Labour costs, excluding one-off items, percentage changes, Labour Cost Index 2012=100 (9.6.2017)
• Appendix table 5. Seasonally adjusted labour costs, Labour Cost Index 2012=100 (9.6.2017)
• Appendix table 6. Seasonally adjusted labour costs, percentage changes, Labour Cost Index 2012=100 (9.6.2017)
• Appendix table 7. Standard Industrial Classification 2008 (9.6.2017)

Revisions in these statistics

• Revision of data (9.6.2017)

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Updated 9.6.2017