16 June 2014

2014- n° 141

In Q1 2014, the labor cost index-wages and salaries increased by 0.5% while the labor cost index-total labor cost decreased by 0.5% Labor cost index in industry, construction and services - 1st Quarter 2014

Warning: Since the Q1 2013, the tax credit for encouraging competitiveness and jobs (CICE) was included in the calculation of the labor cost index as a subsidy received by the employer. The rate of the CICE has increased from 4 % to 6 % from the 1 ^st January of 2014. In Q4 2013, for business economy (excluding agriculture), the year-on-year changes of the labor cost index – total labor cost (+0.4%) is 1.8 points lower than what it would have been without CICE (+2.2%). The LCI – wages & salaries is not impacted.

In the first quarter of 2014, the labor cost index (LCI) - wages & salaries for the business economy slowed down very slightly (+0.5% after +0.6%) in seasonally adjusted data. In year-on-year changes, the LCI - wages & salaries increased by 2.3% after +2.0% in the previous quarter. Work hours slightly decreased (-0.1% in year-on-year changes).

Wages increased by 0.5% in industry after +0.4%. In particular, they recovered in the water supply sector (+0.4% after -0.2%). As was the case in the previous quarter, they increased by 0.5 % in the manufacturing sector. In year–on–year changes, wages increased very slightly in industry (+2.3% after +2.1%).

Wages increased by 0.4% in services after +0.6% in the fourth quarter. Particularly, they slowed down sharply in real estate (+0.3% after +1.7%). In year–on–year changes, wages increased by 2.3% in services. In construction, they slowed down in the first quarter of 2014 (+0.3% after +0.6%).

The evolution of wages during the fourth quarter of 2013 is revised upwards by 0.1 point in quarterly variation but remained unchanged in annual variation.

Since the 1^st January of 2014, the tax credit rate for encouraging competitiveness and jobs (CICE), included in the calculation of the LCI-total labor cost as a subsidy received by the employer, has been raised from 4% to 6%. In the first quarter of 2014, the labor cost index (LCI) - total labor cost for the business economy slowed down by 0.5% in seasonnally adjusted date, after +0.6% in the fourth quarter.

In year-on-year changes, the LCI - total labor cost sharply sped up in the first quarter (+1.7%). It slowed down between the first quarter of 2012 and 2013 because of the implementation of the CICE (at 4%) on 1^st January, 2013. This quarter, the year-on-year changes is calculated with the rise of the rate of the CICE at 6% on 1^st January, 2014. Without this effect, the LCI - total labor cost would have increased by 2.6% in year-on-year changes.

No revision of the index of the fourth quarter 2013

The evolution of the labor cost index (LCI) – total labor cost in the fourth quarter of 2013 is not revised.

Moreover, the LCI - total labor cost has been revised between 2000 and 2008 consecutively to an improvement in the methodology (for more information about this change see the frame “Learn more”).