Labour costs across the eurozone and wider European Union have continued their upward trajectory in the first quarter of 2025, reflecting deeper structural shifts in wage growth and employment-related expenses across the continent.
Fresh data show that hourly labour costs rose by 3.4% year-on-year in the eurozone, while the broader EU saw a slightly sharper increase of 4.1%. The rise in the eurozone was evenly split, with both wages and non-wage costs—such as social contributions and employment taxes—increasing by 3.4%.
Within the EU, wages surged by 4.1%, while non-wage costs followed closely behind with a 3.8% rise.
Sectoral data reveals striking differences. Labour costs in the eurozone’s public sector rose by a modest 2.5%, whereas private industry registered a stronger increase of 3.8%. Construction led the charge with a 4.7% rise, followed by the services sector at 4.3%.
In the EU, the construction sector outpaced others with a 5.2% increase in labour costs, while services recorded a 4.7% gain.
Notably, the strongest wage growth was observed in professional, scientific and technical activities, the real estate sector, and in water supply, waste management and remediation services.
The continuing rise in labour costs points to persistent changes in the European labour market landscape—developments likely to fuel future policy debates around inflation, competitiveness and fiscal strategy.