Which EU countries have the highest and lowest hourly labour costs and what differences are there between them even by sector of the economy? The data published on Tuesday by Eurostat are quite revealing.
In the euro area, in the first quarter of 2026, compared to the same quarter of the previous year, the largest increases in hourly wage costs for the economy as a whole were recorded in Hungary (+16.4%), Bulgaria (+13.2%) and Croatia (+9.2%). The lowest increases were recorded in Malta (+1.3%), France (+1.8%), followed by Denmark and Latvia (+2.5% each).
In Cyprus, the increase recorded in the first quarter of 2026 for hourly labour costs is at 3.7%, slightly above the Eurozone average, which is at 3.2% and below the first quarter of 2025, which was at 4.3%.
The feeling that exists, or at least what the trade unions support, is that despite the wage increases, the workers feel that the improvement in wages is not enough to meet their needs due to high prices and the employers that they have given enough.
However, the data show that wage costs continue to move at a faster pace than inflation of 1.21% in the first quarter, partly highlighting the pressure that businesses may be under. The picture in the increase in hourly labour costs is not the same in all countries.
In Germany, wage increases of 3% in the first quarter of 2026 are accompanied by strong productivity, thanks to investments in technology and training. In Spain, the experiment of reducing the weekly work is accompanied by systematic monitoring of efficiency and the hourly increase is 5.1%.
In Greece the increase according to Eurostat is 6.5%, in the Czech Republic 6.9%, in Estonia 6.2%, in France 1.8%, in Latvia 2.3%, in the Netherlands 3.6%, in Slovakia 5.6%, in Slovenia 3.4%.
Another interesting element is how the hourly labour costs per economic activity moved. In the euro area, it increased by 3.3% in industry, 4.1% in construction and 3.1% in services.
In Cyprus, hourly costs in industry increased by 4.7% in the first quarter of 2025 compared to the previous quarter, and in the rest of the countries the following differences are recorded: Bulgaria 14.1%, Czech Republic 5.2%, Denmark and Germany 3%, Estonia 6.6%, Ireland 3.5%, Greece 6.6%, Spain 3%, France 2.4%, Croatia 11.4%, Italy 2.9%, Latvia 3.7%, Lithuania 9%, Luxembourg 3.3%, Hungary 6.3%, Malta 9.8%, Austria 1.8%, Poland 6.5%, Portugal 5.9%, Romania 6.2%, Slovenia 3.9%, Slovakia 5.2%, Finland 3.7%, Sweden 3.1%.
In Cyprus, hourly labour costs in the construction sector increased by 4.5% in the first quarter of 2026, compared to last year. The largest increase of 14.5% in this area is recorded in Croatia. It is followed by Greece with 13.9%, Bulgaria and Estonia with an increase of 11.7%. In the services sector, the increase in hourly labour costs in Cyprus is 4.8% in the first quarter of 2026 compared to last year and the largest increase of 12.5% is recorded in Bulgaria.
In Greece, the increase is 7% and in the Czech Republic 9%. It should be noted that the labour cost index is a short-term indicator that shows the evolution of the hourly labour cost borne by employers, in nominal terms, i.e. without adjustment for the evolution of prices. It is calculated by dividing labour costs in national currency by the number of hours worked.
