Total hourly labour costs in the euro area (EA12) rose at an annual rate of 2.4% in nominal terms in the fourth quarter of 2006, down from 2.5% in the previous quarter. In the EU25 the annual rise was 2.7% in the fourth quarter of 2006, down from 3.0% in the previous quarter.
The two main components of labour costs are wages and salaries, and non-wage costs. In the euro area, wages and salaries grew at an annual rate of 2.5% in the fourth quarter of 2006, and non-wage costs by 2.2%, compared with 2.7% and 2.2% respectively in the third quarter of 2006. In the EU25, wages and salaries rose by 2.8% and the non-wage component by 2.3%. In the previous quarter the corresponding rates were 3.2% and 2.0%.
A breakdown by economic activity shows that in the euro area hourly labour costs rose at an annual rate of 2.2% in industry, 2.6% in construction and 2.5% in services in the fourth quarter of 2006. In the EU25, labour costs grew by 2.5% in industry, and by 2.8% in both construction and services.
These figures come from Eurostat, the Statistical Office of the European Communities.

Member States
Among the Member States for which data are available for the fourth quarter of 2006 the smallest annual increases in hourly labour costs were observed in Germany (1.2%), Malta (1.7%) and Sweden (2.0%). The highest annual rises were registered in Latvia (26.9%), Lithuania (19.7%), Estonia (17.6%) and Hungary (10.8%).
Annual growth in the wages and salaries component ranged from 1.0% in Germany to 27.2% in Latvia. The range for non-wage costs was from -1.4% in Malta to 26.2% in Latvia.