SYNTHESIS INE@COVID-19, 18 May-2021

May . 18 . 2021 SYNTH SIS IN @ COVID-19 www.ine.pt page 19/23 Communication Unit | tel: +351 21 842 61 10 | sci@ine.pt The Labour Cost Index increased by 7.0% in the 1 st quarter of 2021, mainly as a result of the reduction in the number of hours worked The working-day-adjusted Labour Cost Index (LCI) registered a year-on-year increase of 7.0% in the 1 st quarter of 2021 (6.8% in the previous quarter). This outcome was the combined result of: • An increase of 1.9% in the average cost per employee (+3.3% in the previous quarter); the average cost per employee increased in all sectors of economic activity; • A 4.0% reduction in the number of hours worked per employee (-3.1% in the previous quarter); the reduction in the number of hours worked per employee was also across all economic activities. Wage and other costs, per hour worked, increased by 7.6% and 4.3%, respectively, compared to the same period of the previous year (+6.7% and +7.6% in the 4 th quarter of 2020, in the same order). Labour Cost Index Working days adjusted data (year-on-year rate of change) Wage costs increased mainly due to increases in base wage, bonuses, and regular and irregular allowances. The less marked increase in other costs results from the reduction or exemption from payment of social contributions for enterprises that joined the simplified layoff regime or the extraordinary support for the progressive resumption of activity. Comparison with the European Union The latest available information on the year-on-year rate of change in the LCI by Member State relates to the 4 th quarter of 2020 and was released by Eurostat on the 18 th of March 2020. The year-on-year rate of change in the LCI for the European Union as a whole (27 countries) was 3.3% in the 4 th quarter of 2020. Portugal registered a year-on-year increase above the European Union average: 6.6%. Labour Cost Index in EU countries Working days adjusted data – 4 th quarter of 2020 (year-on-year rate of change) 7.0% 1.9% - 4.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 1 st Q 2016 1 st Q 2017 1 st Q 2018 1 st Q 2019 1 st Q 2020 1 st Q 2021 Total Average cost per employee Number of hours effec�vely worked per employee 11.6% 10.0% 9.8% 8.7% 8.3% 7.3% 7.3% 7.1% 6.6% 4.6% 3.5% 3.5% 3.4% 3.4% 3.3% 3.2% 2.8% 2.3% 1.8% 1.4% 1.4% 1.2% 1.1% 0.9% -0.5% -1.1% -3.7% -4.8% Austria Bulgaria Czechia Romania Hungary Slovakia Poland Latvia Portugal Lithuania Slovenia Slovenia Spain Greece EU 27 Cyprus France Sweden Denmark Italy Netherlands Estonia Belgium Luxembourg Finland Croa�a Malta Ireland More information at: Labour cost index – 1 st quarter of 2021 (14 May 2021)