Labour Cost Indices
Labour cost indices have been hard to follow during 2020, where labour market measures following the Covid-19 crisis have affected the indices. Since what type of labour market measures were taken varies from country to country, this has also affected the statistics differently depending on what country one is looking at.
Comparing the Labour Cost Index with manufacturing industry labour within Spain and Germany, we can see that labour in Spain was ~15% higher in Q2 2020 compared to Q1 2020. The same effect cannot be observed in the German index. In Q3 2020, the Spanish labour cost index had returned to reasonable levels on par with the German index.
Unit Labour Cost (an index following the productivity adjusted labour cost) on the other hand shows similar movements in Germany and Spain, with a momentary increase during Q3 2020.
From Q3 2019, the labour cost increased by 3% in Spain and 2% in Germany, while unit labour cost increased by 5% in Spain and 3% in Germany. Since unit labour cost is increasing more than the underlying labour cost, this indicates that productivity within the manufacturing industry in Spain and Germany has decreased since Q3 2019.
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