EU Labour Costs Rise In First Quarter, Signals Economy Is Improving

Hourly wage costs across the European Union (EU) jumped 2% in the first quarter of 2013, hinting the 27-member currency bloc's economy is inching its way toward a recovery.

The 17-member eurozone, the core of the 27-member EU entered its longest ever recession in the first quarter of 2013, since records began in 1995, with the economy contracting for six consecutive quarters, after a fall in output in France, Italy, Spain, the Netherlands and Finland.

The two main components of labour costs are wages and salaries; and non-wage costs.

Hourly wages and salaries rose by 2.0% and the non-wage component grew 1.9% in the first quarter of 2013, across the EU, compared with 1.2% and 1.3% respectively for the fourth quarter of 2012. Overall, hourly labour costs rose 1.9% in the January-March quarter, compared with a 1.3% increase during the October-December quarter of the previous year, Eurostat data showed.

Wages and salaries per hour worked grew by 1.7% across the eurozone and the non-wage component rose 1.4% in January-March quarter, compared with 1.4% and 0.9% respectively during the October-December quarter, data from the EU's statistics office showed. Overall, hourly labour costs in the 17-member eurozone increased 1.6% in first quarter, compared with 1.3% for the fourth quarter of 2012.

A breakdown by economic activity showed that industrial labour costs rose the most during the first quarter, at 3.4% per hour in the EU and 3.3% per hour in the eurozone.

Hourly labour costs grew by 3.9% in Germany, Europe's strongest economy; 2.5% in Italy, 1.6% in the UK and 0.1% in France.

Industrial production in the 17-nation eurozone, where millions of people are unemployed, disregarded market expectations of a month-on-month decline and grew 0.4% in April, following a 0.9% jump in March, 2013. Economists polled by Reuters had expected a 0.2% decline in April's output.