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Published: 8 September 2017

Cost of an hour worked went up by 1.2 per cent in April to June year-on-year

Private sector labour costs went up by 1.2 per cent in April to June 2017 when compared with the respective period of the year before. Seasonally adjusted labour costs increased by 0.2 per cent in April to June 2017. There were three less working days in the second quarter of 2017 than in the corresponding period of 2016 as this year, Easter was in the second quarter and last year it was in the first quarter. In the Labour Cost Index, a decrease in the number of working days has a increasing effect on costs.

In the private sector, labour costs without one-off pay items, such as performance-based bonuses, increased by 0.3 per cent in April to June 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 0.5 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 1.6 per cent in April to June 2017 when compared with the respective period of the year before. Seasonally adjusted labour costs went down by 3.3 per cent. Labour costs without one-off pay items increased by 1.7 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 1.1 per cent.

In the local government sector, the cost of an hour worked decrease by 1.0 per cent in April to June 2017 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 rise of 0.2 per cent. Over the same period, the index of wage and salary earnings in the local government sector went down by 1.2 per cent.

In the public sector, both cuts in holiday bonuses according to the Competitiveness Pact and lower social insurance contributions had a significant effect on the decline in labour costs.

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

The cost per an hour worked went up by 2.7 per cent in manufacturing industries (B to E), by 2.8 per cent in construction (F), and by 0.9 per cent in business service activities (G to N) in April to June 2017.

In manufacturing industries, the biggest rise in costs of an hour worked in the second quarter of 2017 was in the chemical industry, 6.8 per cent. In the forest industry, costs went down by 0.7 per cent, while in the food industry there was a rise of 5.6 per cent in labour costs. Among service industries, the biggest fall in costs, 0.6 per cent, was in transportation and storage, and the biggest rise, 2.8 per cent, was in trade.

The seasonally adjusted cost of an hour worked in all manufacturing (B to E) went up by 0.3 per cent in April to June 2017 compared with the corresponding period last year. In construction, the seasonally adjusted cost of an hour worked went up by 2.8 per cent and in business service activities by 0.9 per cent.

The seasonally adjusted cost of an hour worked went down by 2.7 per cent in the forest industry and up by 2.7 per cent in the metal industry in the April to June period of 2017 from the same period of the previous year. In trade, seasonally adjusted costs increased by 2.8 per cent and in financial and insurance activities decreased by 0.6 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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Updated 8.9.2017

Referencing instructions:

Official Statistics of Finland (OSF): Labour cost index [e-publication].
ISSN=1798-3746. 2nd quarter 2017. Helsinki: Statistics Finland [referred: 29.3.2024].
Access method: http://www.stat.fi/til/tvki/2017/02/tvki_2017_02_2017-09-08_tie_001_en.html