Where Labour Costs Are Rising Fastest in Europe

Hourly labour costs across Europe are rising at different rates by country and sector. Eurostat's Labour Cost Index covers EU member states, and the most recent figures are for Q1 2026. The country spread runs from a 16.4% increase in Hungary to 1.3% in Malta.

The EU-Wide Headline

In Q1 2026, hourly labour costs rose 3.6% across the EU compared with the same quarter of the previous year. In the euro area - which now covers 21 member states - the increase was 3.2%. Both figures are calendar-adjusted to correct for differences in the number of working days between periods.

The two main components moved at slightly different rates. Across the EU, hourly wages and salaries increased by 3.7% and the non-wage component rose by 3.2%. In the euro area, wages and salaries grew by 3.4% and the non-wage element by 2.9%.

Eurostat notes that labour costs are an important potential source of inflation: businesses may pass higher labour costs - in particular where cost increases are not reflected in higher productivity - on to consumers via higher prices.

Construction Leads the Sector Rankings

Construction posted the highest hourly labour cost growth across EU sectors in Q1 2026, at 4.2% in the EU and 4.1% in the euro area - both above the respective overall averages.

Industry grew at 3.6% in the EU and 3.3% in the euro area. Services recorded 3.4% (EU) and 3.1% (euro area).

Looking at wage costs by specific activity, the highest annual increases in the EU were in mining and quarrying at 5.7%, real estate activities at 4.8%, and construction and education at 4.4% each. Accommodation and food service activities came in at 2.7%, and arts, entertainment and recreation at 2.8%.

Non-Wage Costs: A Different Sector Picture

The non-wage component showed a different distribution. In the EU in Q1 2026, the steepest non-wage cost increases were in mining and quarrying at 5.3%, information and communication at 4.5%, and administrative and support service activities at 4.4%. Construction and other service activities each recorded 3.8%.

The smallest non-wage increases were in professional, scientific and technical activities and arts, entertainment and recreation, both at 1.6%.

Where Wage Costs Are Rising Fastest by Country

Country-level figures show the widest spread in the data. In Q1 2026, the highest increases in hourly wage costs were:

• Hungary: +16.4%
• Bulgaria: +13.2%
• Croatia: +9.2%

The smallest increases were in Malta (+1.3%), France (+1.8%), and Denmark and Latvia (both +2.5%).

One important caveat: data for Belgium was not available for Q1 2026 at the time of publication, so Belgium is absent from this country comparison.

How This Data Is Published and Used

Eurostat publishes the Labour Cost Index to support wage bargaining, economic analysis, and monetary policy - including for institutions such as the European Central Bank. The index covers the whole economy as defined in NACE Rev. 2 sections B to S, which excludes agriculture, forestry and fishing, and activities of household employers. New data are released quarterly, approximately 75 days after the end of the reference quarter.

If you are tracking salary conditions or comparing European labour markets, NewLuxJob lists current openings across EU countries and sectors.

Source: Eurostat, Labour Cost Index - recent trends, data extracted 2026.