Published: 8 December 2017

Cost of an hour worked decreased by 2.4 per cent in July to September year-on-year

Private sector labour costs decreased by 2.4 per cent in July to September 2017 when compared with the respective period of the year before. Seasonally adjusted labour costs decreased by 2.4 per cent in July to September 2017. There were one less working day in the third quarter of 2017 than in the corresponding period of 2016 as this year. In the Labour Cost Index, a decrease in the number of working days usually has a increasing effect on costs.

In the private sector, labour costs without one-off pay items, such as performance-based bonuses, decreased by 1.3 per cent in July to September 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 0.6 per cent.

Year-on-year change in labour costs in the private sector from the corresponding quarter of the previous year

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 2.4 per cent in July to September 2017 when compared with the respective period of the year before. The extension of working time according to the Competitiveness Pact and lower social insurance contributions had an effect on the decline in labour costs. Seasonally adjusted labour costs went down by 2.2 per cent. Labour costs without one-off pay items increased by 2.0 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 1.0 per cent.

In the local government sector, the cost of an hour worked decreased by 4.4 per cent in July to September 2017 when compared with the respective period of the year before. Cuts in holiday bonuses according to the Competitiveness Pact and lower social insurance contributions had a significant effect on the decline in labour costs. The year-on-year change in labour costs without one-off pay items was a fall of 1.8 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.

Year-on-year change in labour costs according to TOL 2008, 3rd 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 -2,4 -1,3 -2,4
B to E Manufacturing -5,0 -1,0 -4,9
F Construction -1,3 -1,6 -1,3
G to N Business service activities -0,3 -0,7 -0,4
J to R Central government -2,4 -2,0 -2,2
D to S Local government -4,4 -1,8 ..

The cost per an hour worked down by 5.0 per cent in manufacturing industries (B to E), by 1.3 per cent in construction (F), and by 0.3 per cent in business service activities (G to N) in July to September 2017.

In manufacturing industries, the rise in costs of an hour worked in the third quarter of 2017 was in food industry 1.5 per cent, in forest industry 1.2 per cent and chemical industry 0.5 per cent. Costs in the metal industry went down by 10.3 per cent, which was caused by structural changes. Among service industries, the biggest fall in costs, 3.1 per cent, was in transportation and storage, and the biggest rise, 2.5 per cent, was in Information and communication. The rise in costs was due to the growth in the wages and salaries subject to preliminary withholding tax.

The seasonally adjusted cost of an hour worked in all manufacturing (B to E) went down by 4.9 per cent in July to September 2017 compared with the corresponding period last year. In construction, the seasonally adjusted cost of an hour worked down by 1.3 per cent and in business service activities by 0.4 per cent.

In manufacturing industries seasonally adjusted cost of an hour worked went down by 10.3 per cent in the metal industry and up by 1.5 per cent in the food industry in the July to September period of 2017 from the same period of the previous year. Of business service activities, seasonally adjusted costs rose by 1.9 per cent in the industry of trade and by 2.4 per cent in communication activities. Seasonally adjusted costs decreased in transportation and storage and in financial and insurance activities by 3.0 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: Sami Saarikivi

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Tables

Tables in databases

Appendix tables

Revisions in these statistics

Updated 8.12.2017

Referencing instructions:

Official Statistics of Finland (OSF): Labour cost index [e-publication].
ISSN=1798-3746. 3rd quarter 2017. Helsinki: Statistics Finland [referred: 20.2.2018].
Access method: http://www.stat.fi/til/tvki/2017/03/tvki_2017_03_2017-12-08_tie_001_en.html

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