Hourly labour costs in Cyprus have risen sharply, reflecting ongoing inflationary pressures in the economy. According to the Cyprus Statistical Service, preliminary data shows that during the fourth quarter of 2025, these costs increased by 2.7 per cent on an annual basis compared to the same period in the previous year.
Hourly labour: Wages and Non-Wage Costs Both Climb
This increase in hourly labour rates is attributed to both wages and non-wage costs. Specifically, wages and salaries per hour worked saw a year-on-year rise of 2.7 per cent, while non-wage labour costs per hour worked surged by 2.9 per cent. These figures illustrate a comprehensive increase in employment costs across various sectors.
Quarterly Trends Indicate Sustained Growth
When examining the data on a quarterly basis, seasonally adjusted total hourly labour costs rose by 0.7 per cent from the previous quarter. This mirrors the trends seen in wages and salaries, which also recorded a quarterly increase of 0.7 per cent. Non-wage labour costs followed suit with a similar increase, signalling a persistent upward trend in the labour market.
Implications for the Cypriot Economy
The rising labour costs are significant as they contribute to the broader inflation outlook in Cyprus. As employment costs continue to increase, businesses may face challenges in managing their budgets, potentially leading to adjustments in hiring practices or pricing strategies. The data reflects a shifting landscape in the Cypriot economy, with employers needing to adapt to the evolving cost dynamics.
Ongoing Adjustments in Employment Costs
This trend of increasing labour costs underlines the ongoing adjustments in employment expenses within the Cypriot economy. As the labour market evolves, these changes suggest that both employees and employers will need to navigate the implications of rising costs carefully. The latest figures from the Cyprus Statistical Service provide a clear indication of the current economic climate and its potential impact on future growth.
