Cyprus' hourly labour costs increased by 3.7% in the first quarter of 2026 compared with the same period a year earlier, broadly in line with the European Union average and above the euro area rate, according to data released by CySTAT and Eurostat.
The increase points to continued upward pressure on employment costs for businesses, driven by both wage-related and non-wage components.
Preliminary figures from CySTAT showed that hourly wages and salaries in Cyprus rose by 3.8% year-on-year in the January-March period, while hourly non-wage labour costs increased by 3.3%. The 3.8% increase in wage costs was slightly above the EU average.
Eurostat data showed that hourly labour costs across the EU increased by 3.6% in the first quarter of 2026 compared with the corresponding quarter of 2025, while the euro area recorded a 3.2% rise.
At the European level, hourly wages and salaries increased by 3.7% in the EU and by 3.4% in the euro area, whereas the non-wage component of labour costs rose by 3.2% and 2.9%, respectively.
Among EU Member States, the largest increases in hourly wage costs were recorded in Hungary, at 16.4%, followed by Bulgaria with 13.2% and Croatia with 9.2%. The smallest increases were observed in Malta (1.3%), France (1.8%), and Denmark and Latvia, both at 2.5%.
On a quarterly basis, seasonally adjusted total hourly labour costs in Cyprus increased by 1.1% compared with the fourth quarter of 2025. Seasonally adjusted wages and salaries also rose by 1.1%, while non-wage labour costs registered a stronger quarterly increase of 1.5%.
The latest figures indicate that the annual growth rate of total labour costs in Cyprus accelerated from 2.4% in the fourth quarter of 2025, although it remained below the 4.3% increase recorded in the first quarter of last year.
Based on the index with 2020 as the base year (2020=100), Cyprus' total labour costs stood at 119.80 points on a non-seasonally adjusted basis and at 128.06 points after seasonal adjustment during the first three months of 2026.
(Source: CNA)
