SYNTHESIS INE@COVID-19, 2 mar-2021

March . 02 . 2021 SYNTH SIS IN @ COVID-19 www.ine.pt page 16/23 Communication Unit | tel: +351 21 842 61 10 | sci@ine.pt The Labour Cost Index increased by 8.6% in 2020 The working-day-adjusted Labour Cost Index (LCI) registered a year-on-year increase of 6.6% in the 4 th quarter of 2020 (+6.0% in the previous quarter). This outcome resulted from a combination of the following factors: • The average cost per employee: +2.8% (+2.7% in the previous quarter). The average cost per employee increased across all sectors of economic activity; • The number of hours effectively worked per employee: -3.3% (-2.9% in the previous quarter). The decline in the number of hours effectively worked per employee occurred in most economic activities. Labour Cost Index Working days adjusted data (year-on-year rate of change) Wage costs increased essentially due to increases in the base earnings, Christmas allowances, and regular bonuses and allowances. Other costs increased essentially due to increases in the corresponding employer contributions. In 2020 as a whole: • The LCI registered an increase of 8.6%, corresponding to increases of 9.2% in wage costs and 6.1% in other costs; • The average cost per worker increased by 2.0% and the number of hours effectively worked per employee decreased by 5.8%. Comparison with the European Union The latest available information on the LCI year-on-year rate of change by Member State relates to the 3 rd quarter of 2020 and was released by Eurostat on the 16 th of December 2020. The year-on-year rate of change concerning the LCI for the European Union (27 countries) was 1.8% in the 3 rd quarter of 2020. Portugal registered a year-on-year increase above the European Union average: 5.8%. Labour Cost Index in EU countries Working days adjusted data – 4 th quarter 2020 (year-on-year rate of change) 6.6% 2.8% -3.3% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 4Q 2015 4Q 2016 4Q 2017 4Q 2018 4Q 2019 4Q 2021 Total Average cost per employee Number of hours effec�vely worked per employee 6.0% 5.9% 5.8% 5.7% 5.5% 4.8% 4.7% 3.5% 3.0% 2.7% 2.3% 1.8% 1.8% 1.8% 1.8% 1.7% 1.4% 1.4% 1.3% 1.2% 1.2% 0.3% 0.0% -0.7% -2.9% -3.8% -6.1% Slovakia Czechia Portugal Romania Hungary Lithuania Poland Bulgaria Latvia Spain France Denmark EU27 Luxembourg Slovenia Germany Belgium Greece Estonia Finland Sweden Italy Netherlands Croa�a Ireland Cyprus Malta More information available at: Labour cost index – 4 th quarter of 2020 (12 February 2021)