Private sector labour costs go up 2.4% in Q2

Private sector labour costs increased by 2.4 per cent in April to June 2021 compared to the respective period of the year before, according to Statistics Finland.

Seasonally adjusted labour costs went up by 2.2 per cent in April to June 2021. There was one more working day in the second quarter of 2021 than in the corresponding period of 2020.

In the Labour Cost Index, an increase in the number of working days usually has a decreasing effect on costs.

In the private sector, labour costs without one-off pay items, such as performance-based bonuses, increased by 2.2 per cent in April to June 2021 compared to the corresponding quarter one year ago.

In the central government sector, the cost of an hour worked increased by 2.5 per cent in April to June 2021 when compared with the respective period of the year before. The year-on-year change in labour costs without one-off pay items was a 2.3 per cent increase. Seasonally adjusted labour costs went up by 2.0 per cent.

In the local government sector, the cost of an hour worked increased by 2.4 per cent in April to June 2021 when compared with the respective period of the year before. The year-on-year change in labour costs without one-off pay items was a 1.6 per cent increase. Seasonally adjusted labour costs went up by 2.3 per cent.

In all sectors, the increase in costs is mainly due to the fact that wages and salaries subject to preliminary withholding tax increased more than the number of hours worked.

In the private sector, the increase is also partly explained by the year-on-year increase in social security contributions, as the reduction in employer's TyEL contributions that began in the second quarter of 2020 ended at the end of the year.