Eurostat data show Cyprus recorded one of the lowest increases in hourly labour costs in the European Union in the fourth quarter of 2025. Hourly labour costs increased by 2.7% year-on-year.

Overview Of Eurostat Findings

Eurostat data show hourly labour costs increased by 3.7% across the European Union and by 3.3% in the euro area compared with the same quarter of 2024. Data indicate continued growth in labour costs across European economies.

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Moderate Wage Growth In Cyprus

Cyprus recorded a 2.7% increase in hourly labour costs, placing it among the lower-growth countries in the EU. Germany reported a similar rate of increase. Several countries recorded lower or negative growth, including Malta, where labour costs declined by 3.9%. France, Italy, Denmark, and Finland also recorded relatively low increases compared with the EU average.

Sectoral Breakdown And Trends

Sector data show differences in labour cost growth across the EU. In the euro area, wages and salaries increased by 3.0%, while non-wage costs rose by 4.4%. Across the EU, wages increased by 3.4% and non-wage costs by 4.5%. Country-level data show higher increases in some markets. Slovenia recorded a 19.1% increase in hourly labour costs, while Bulgaria and Croatia reported increases of 13.8% and 10.5%, respectively. Within the euro area, labour costs increased by 2.5% in industry, 4.0% in construction, and 3.4% in services. EU-wide data show similar trends across sectors.

Detailed Analyses Of Wage And Non-Wage Components

Wages and non-wage costs both contributed to overall increases in labour costs. Sectors including real estate, professional and technical services, and education recorded increases of 4.6%, 4.5%, and 4.4%, respectively. Lower increases were recorded in sectors such as electricity and manufacturing, while mining and quarrying reported a decline.

Implications For European Markets

Labour costs increased across most EU economies, while Cyprus recorded a lower rate of growth. Lower wage growth may affect cost competitiveness compared with other markets. Differences across countries and sectors reflect varying economic conditions and labour market dynamics within the EU.

Overall, the Eurostat report provides a vital snapshot of the current economic environment, advising strategic adaptations in both labour market policies and business cost management across the European Union.