Romania’s labour costs up 12.5 pct y/y in Q2 2019 fueled by government pay raises, new regulations

Sorin Melenciuc 03/09/2019 | 11:02

Romania continues to register a double-digit growth rate of the hourly labour costs, of 12.5 percent in the second quarter of 2019, mainly due to wage increases in the public sector and to new regulations in the construction sector.

However, Romania still ranks second-lowest in the EU in terms of average wage, after Bulgaria.

In the second quarter of 2019, the hourly labour costs rose by 5.7 percent quarter-on-quarter and by 12.5 percent year-on-year.

The highest growth rates were registered in education (+21.8 percent y/y), and construction (18.3 percent). Wages in education were increased by the government, while wages in constructions rose due to a new regulation imposing a much higher minimum wage (RON 3,000) in the sector since the beginning of this year.

In 2018, Romania’s hourly labour costs rose by 13.1 percent, the fastest growth rate in the EU.

Romania’s hourly labour costs rose from EUR 4.9 in 2015 to EUR 5.3 in 2016, EUR 6.2 in 2017 and EUR 6.8 in 2018.

Compared with 2004, when they amounted EUR 1.9, Romania’s hourly labour costs grew 3.6 times, Eurostat data show.

Due to the fast wage growth, the gap between Romania and the other countries from EU’s Eastern flank has diminished.

In 2004, labour costs in Hungary were 3.1 times higher than in Romania (EUR 5.9 vs. EUR 1.9), but last year the difference declined to 35 percent (EUR 9.2 vs. EUR 6.8). Labour costs in Romania exceeds by 26 percent the level registered in Bulgaria (EUR 5.4).

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