Cyprus was one of only four EU countries where hourly labour costs decreased as salaries also went south on an annual basis in the third quarter, according to Eurostat.
It was also only one of two countries where wages declined in July to September.
Wages and salaries declined 0.8% in Q3 while the non-wage component decreased by -17.4% year-on-year. The only other EU country where wages declined was Austria (-0.2%).
Hourly labour costs declined by 3.8% in Cyprus in Q3 as the EU average increased 1.8% from the same quarter last year.
Cyprus had the second biggest decline in hourly labour costs of 3.8% behind Malta’s 6.1% drop, the other two countries were Ireland (-2.9%) and Croatia (-0.7%).
In the euro area, the cost of wages & salaries per hour worked grew by 2.2% and the non-wage component dropped by 0.4% in Q3, compared to 2019.
In Q2 2020, the annual changes were +4.5% for wages & salaries and +0.7% for the non-wage component.
In the EU, the cost of hourly wages & salaries increased by 2.4% and the non-wage component declined by 0.1%.
For Q2 2020, the annual change of wages & salaries was +4.6% the non-wage component remained unchanged.
In Q3, annual hourly labour costs rose by +1.6% in the euro area and by +1.8% in the EU.
In Q2 2020, hourly labour costs increased by +3.6% and +3.5% respectively.
The two main components of labour costs are wages & salaries and non-wage costs.
In both the EU and the euro area, the non-wage component reduced the growth in hourly labour costs, due to the tax reliefs and subsidies introduced by EU governments to support enterprises affected by the crisis.
Breakdown by economic activity
In Q3 2020 compared, annual hourly labour costs in the euro area rose by +1.9% in the (mainly) non-business economy and by +1.4% in the business economy: +1.4% in services, +1.2% in industry and +2.4% in construction.
In the EU, hourly labour cost grew by +2.2% in the (mainly) non-business economy and by +1.6% in the business economy: +1.6% in services, +1.4% in industry and +2.4% in construction.
Economic activities that recorded the highest increases in hourly wage costs were: ‘Arts, entertainment and recreation’ (+4.6%), followed by Real Estate (+4.1%) and Accommodation and food service (+3.8%).
The sectors with the highest decreases in the non-wage component were Accommodation and food service activities (-11.9 %), Arts, entertainment and recreation’ (-5.9 %) and Administrative and support services (-3.4%).
