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Latest publication: Labour cost index 2021, 4th quarter

Published: 9 December 2021

Private sector cost of an hour worked increased by 4.2 per cent in July to September year-on-year

According to Statistics Finland, private sector labour costs increased by 4.2 per cent in July to September 2021 when compared with the respective period of the year before. Seasonally adjusted labour costs went up by 3.2 per cent in July to September 2021. In the third quarter of 202, the number of working days was the same as in the corresponding period of 2020.

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 private sector, labour costs without one-off pay items, such as performance-based bonuses, increased by 4.4 per cent in July to September 2021 compared to the corresponding quarter one year ago.

In the central government sector, the cost of an hour worked increased by 5.4 per cent in July to September 2021 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 5.3 per cent increase. Seasonally adjusted labour costs went up by 5.1 per cent.

In the local government sector, the cost of an hour worked increased by 3.0 per cent in July to September 2021 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 3.7 per cent increase. Seasonally adjusted labour costs went up by 2.8 per cent.

In the private sector and in the local government sector, the increase in costs is mainly due to the fact that wages and salaries subject to preliminary withholding tax increased more than the hours worked. In the central government sector, the wages and salaries subject to preliminary withholding tax also increased, in addition, the cost of an hour worked is increased by a decrease in the number of hours worked.

Year-on-year change in labour costs according to industry (TOL 2008) and sector, 3rd quarter 2021

Code Industry/Sector 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 4,2 4,4 3,2
B to E Manufacturing 4,8 4,6 3,6
F Construction 2,6 4,1 2,2
G to N Business service activities 5,0 5,3 4,6
J to R Central government 5,4 5,3 5,1
D to S Local government 3,0 3,7 2,8

Changes by industry

The cost per an hour worked went up by 4.8 per cent in manufacturing industries (B to E) in July to September 2021 compared with the corresponding period last year. In business service activities (G to N), the costs went up by 5.0 per cent and in construction (F) 2.6 per cent.

In manufacturing industries in the third quarter of 2021, the cost per an hour worked went up by 5.7 per cent in the metal industry, 4.1 per cent in the food industry, 3.6 per cent in the forest industry and 2.2 per cent in the chemical industry. Among service industries, the biggest rise in costs, 5.3 per cent, was in financial and insurance activities and the smallest, 1.8 per cent, in information and communication.

The seasonally adjusted cost of an hour worked went up by 3.6 per cent in manufacturing industries (B to E). In business service activities (G to N), costs went up by 4.6 per cent and in construction (F) 2.2 per cent in July to September 2021 compared with the corresponding period last year.

In manufacturing industries, seasonally adjusted cost of an hour worked went up by 5.2 per cent in the metal industry, 3.2 per cent in the food industry, 2.6 per cent in the forest industry and 2.0 per cent in the chemical industry in the July to September period of 2021 from the same period of the previous year. In business service activities, seasonally adjusted costs rose by 2.2 per cent in financial and insurance activities and 1.3 per cent in information and communication.

The Labour Cost Index measures the change in wage and salary costs calculated per hour worked

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 subject to preliminary withholding tax 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.

Starting from the first quarter of 2019, the wages and salaries sum of the labour cost index is based on the Incomes Register. The wages and salaries sum are used to raise the labour costs reported by the data providers to the industry level.


Source: Wages, Salaries and Labour Costs, Statistics Finland

Inquiries: Pekka Haapala 029 551 3460, Tuomas Lahti 029 551 3299, Katri Lepikkö 029 551 3233, tvkindeksi@stat.fi

Head of Department in charge: Hannele Orjala

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Tables

Tables in databases

Appendix tables

Revisions in these statistics

Updated 9.12.2021

Referencing instructions:

Official Statistics of Finland (OSF): Labour cost index [e-publication].
ISSN=1798-3746. 3rd quarter 2021. Helsinki: Statistics Finland [referred: 19.8.2022].
Access method: http://www.stat.fi/til/tvki/2021/03/tvki_2021_03_2021-12-09_tie_001_en.html