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Stagnation of Labor Costs in Croatia in the Third Quarter, Growth in the EU

Labor costs per hour in Croatia have nearly stagnated in the third quarter compared to the same period last year, following two quarters of more pronounced growth, while the European Union has continued its steady growth, according to data from the European statistical office.

In the third quarter of this year, seasonally adjusted labor costs per hour in Croatia have almost stagnated on an annual basis. In the previous quarter, they increased by three percent, and in the quarter before that by 2.3 percent, according to Eurostat’s report. Meanwhile, wage costs stagnated, and contribution costs were almost unchanged on an annual basis.

Among EU countries, Belgium and the Netherlands also recorded stagnation in labor costs in the third quarter, according to Eurostat’s report.

The highest growth in labor costs per hour in the third quarter was recorded by Latvia and Bulgaria, both at 7.4 percent. This was followed by Romania at 7.3 percent, Estonia at 6.1 percent, and Lithuania at 5.7 percent. The largest decline in labor costs per hour was recorded by Portugal, at 2.8 percent, followed by Slovenia, with a decrease of 1.5 percent.

In the EU as a whole, seasonally adjusted labor costs per hour increased by 1.8 percent in the third quarter compared to the same quarter last year, almost at the same pace as in the previous quarter. Meanwhile, wage costs increased by two percent, and contribution costs by 1.1 percent.

According to Eurostat’s calculations, the Eurozone recorded a growth in labor costs per hour of 1.1 percent in the third quarter compared to the same quarter last year, making their growth half a percentage point stronger than in the previous quarter. Wage costs increased by 1.4 percent, while contribution costs nearly stagnated on an annual basis.

When viewed by sectors, total labor costs per hour in the EU increased the most in the construction and service sectors during the period from July to September, by 2.3 and 2.0 percent, respectively. In the manufacturing industry, their growth was somewhat milder, amounting to 1.6 percent.

In the Eurozone, however, the industry and service sectors led with an increase in total labor costs per hour of 1.3 and 1.2 percent, respectively. In the construction sector, they increased by 0.8 percent, according to Eurostat data.