Labour cost in Czechia has been rising sharply

Labour cost in Czechia has been rising sharply
Czech labour costs increases were sixth highest in the EU in 2Q19
By bne IntelliNews November 28, 2018

Czechia is a leader amongst fast rising labour costs in Central and Eastern Europe (CEE), with average wages up 9.3% y/y in the 2Q18, the sixth highest in the EU, the Czech Statistics Office reported in its monthly issue released on November 25.

On average the cost of employees has been rising across the European Union by 2.6% y/y. Particular sectors, however, vary significantly. Construction labour costs increased by 4.1%, while industry and services rose only 2.8% and 2.7% (excluding public sector services) respectively. Growth in agriculture, public services or non-market activities (in social services), health care, education has been recorded at 2.2%, under the average of the whole economy.

“Today, it is much more difficult to find employees working in construction in Western Europe, including the labour force coming from the new member states,” said spokesman of the Chamber of Commerce of the Czech Republic Miroslav Diro for daily “The new EU member states in Central and Eastern Europe have had lower income and therefore wage level of their citizens. Wage convergence is an objective accompanying phenomenon,” he stressed.

The highest y/y increase in nominal hourly labour cost in the 2Q18 was reached by Romania (15.6%), Latvia (11.7%) and Hungary (10.2%), followed by Lithuania and Croatia (both 9.8%). The Czech Republic recorded an increase of 9.3%. Labour costs grew the least in Luxembourg (0.6%), Spain (0.7%) and the Netherlands (0.9%). 


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