Hourly labour costs in the Euro Area increased 2.3 percent year-on-year in the fourth quarter of 2018, following a 2.5 percent rise in the previous period and below market expectations of a 2.7 percent gain. By economic activity, hourly labour costs rose by 1.9 percent in industry, by 2.4 percent in construction, by 2.5 percent in services and by 2.4 percent in the (mainly) non-business economy. Among Eurozone's largest economies, labour cost growth slowed in Germany (2.0 percent vs 2.6 percent), Spain (1.1 percent vs 2.7 percent) and Italy (2.2 percent vs 2.4 percent) but picked up in France (2.5 percent vs 2.2 percent. Labour Costs in the Euro Area averaged 100.95 Index Points from 2008 until 2018, reaching an all time high of 116.60 Index Points in the fourth quarter of 2018 and a record low of 85.10 Index Points in the first quarter of 2008.
Labour Costs in Euro Area is expected to be 103.00 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Labour Costs in Euro Area to stand at 118.60 in 12 months time. In the long-term, the Euro Area Labour Costs is projected to trend around 120.20 Index Points in 2020, according to our econometric models.