Despite Growth, Hourly Labor Costs in Croatia Among the Lowest in the EU

Average hourly labor costs in Croatia last year amounted to 9.6 euros. This marks a return to the level of 2013 after sliding to 9.4 euros the previous year, according to Eurostat data.

Hourly labor costs in Croatia slightly increased in 2015, although they remain among the lowest in the European Union and significantly below the European average, according to data from the European statistical office. Average hourly labor costs in Croatia last year amounted to 9.6 euros. This marks a return to the level of 2013 after sliding to 9.4 euros the previous year, according to Eurostat data.

In 2015, Croatia ranked among the EU countries with the lowest average hourly labor costs, led by Bulgaria with only 4.1 euros. Romania follows with five euros, Lithuania with 6.8 euros, Latvia with 7.1 euros, Hungary with 7.5 euros, and Poland with 8.6 euros. Denmark recorded the highest average hourly labor costs in 2015, at 41.3 euros. Belgium with 39.1 euros and Sweden with 37.4 euros per hour are also at the top. At the EU level, hourly labor costs averaged 25 euros last year, and 29.5 euros in the eurozone, calculated by the European statistical office.

Croatia and Denmark with the Lowest Growth in Labor Costs

Croatia, with an increase in hourly labor costs in 2015 of 1.7 percent expressed in local currency, the same as in Denmark, recorded the lowest increase among EU countries not in the eurozone. The highest increases in that group of countries were recorded in Romania, with an increase of 8.3 percent, and in Bulgaria, with an increase of seven percent. Eurostat notes that exchange rate changes affect the data for that group. Among eurozone members, the highest increases in hourly labor costs last year were recorded in Latvia, with 7.3 percent, followed by Lithuania with 5.6 percent, and Estonia with 5.3 percent. Only Cyprus saw a decrease of one percent, and Italy a decrease of 0.5 percent. At the EU level, hourly labor costs increased by two percent in 2015, and by 1.5 percent in the eurozone.

Industry with the Highest Costs

Among individual sectors at the EU level, the highest average labor costs in 2015 were recorded in the industry, at 25.9 euros per hour. This was followed by the service sector with 24.9 euros per hour, and the construction sector with 22.4 euros per hour. In the predominantly non-business sector without public administration, hourly labor costs amounted to 25.1 euros.

The industry in the eurozone recorded even higher labor costs in 2015, at 32.3 euros per hour. In the service sector, they amounted to 28.6 euros per hour, and in the construction sector, 25.8 euros per hour. The predominantly non-business sector without public administration recorded labor costs of 29.4 euros per hour, according to Eurostat data.

When observing the structure of costs, the share of contributions in hourly labor costs in the EU last year was 24 percent, and 26 percent in the eurozone. According to available Eurostat data, France recorded the highest share of contributions in labor costs among EU countries last year, at 33.2 percent. The lowest was in Malta, where it amounted to 6.6 percent. In Croatia, the share of contributions in hourly labor costs in 2015 amounted to 14.9 percent, according to the Eurostat report.