13 December 2013

2013- n° 287

In Q3 2013, the labor cost index-total labor costs decreased sharply Labor cost index in industry, construction and services - 3rd Quarter 2013

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. In Q3 2013, for business economy (excluding agriculture), the year-on-year changes of the labor cost index – total labor cost (+0.5%) is 1.8 points lower than what it would have been without CICE (+2.3%). The LCI – wages & salaries is not impacted.

In the third quarter of 2013, the labor cost index (LCI) - wages & salaries for the business economy slowed down (+0.2%) in seasonally adjusted data. In the second quarter of 2013 the index had increased by 1.0%. In year-on-year changes, the LCI - wages & salaries increased by 2.0%. Hours worked slightly decreased (-0.1% in year-on-year changes).

Wages decreased by 0.2% in industry after +1.3% in the second quarter 2013. Particularly, they remained stable in the manufacturing sector (+0.1% after +1.2%). In year-on-year changes, wages rised by 2.5% in industry. In the construction sector, they increased in the third quarter 2013 (+0.8% after +0.5%). In year on year changes, they slightly improved : +1.8% after +1.6%.

Wages decreased by 0.3% in services in the third quarter 2013 after +0.9%. They slowed down especially in financial activities (+0.3% after +1.6%), and decreased in administrative and support service activities : -0.4% after +1.9%. However, they sped up in information and communication (+0.9% after +0.4%). In year on year changes, wages slightly slowed down in services (+1.9% after +2.1%).

The evolution of wages in the second quarter of 2013 is not revised this quarter.

From the 1^st January of 2013, date where it was implemented, the tax credit for encouraging competitiveness and jobs (CICE) is taken into account in the calculation of the LCI – total labor cost as a subsidy received by the employer. In the third quarter of 2013, when incorporating the CICE, the labor cost index (LCI) – total labor cost for the business economy increased by 0.3% (seasonally adjusted data) after +1.1% in the second quarter of 2013.

In year-on-year changes, the labor cost index (LCI) – total labor cost slightly increased (+0.5%). Without the CICE, it would have increased by 2.3% in year on year changes.

Small revision of the index of the first quarter 2013

The evolution of the labor cost index (LCI) – total labor cost in the second quarter of 2013 is revised downward by 0.1 point in year on year changes and remained unchanged in quarterly changes.