German labour costs rise at strongest rate in over two years

[BERLIN] German labour costs rose in the second quarter at their strongest rate in more than two years, data showed on Tuesday, which may help make other eurozone states' goods comparatively more competitive to produce.

The cost of work - made up of gross earnings and non-wage labour costs - climbed by 3.1 per cent adjusted for calendar effects terms from April to June compared with the same period last year, data from the Federal Statistics Office showed.

That was the sharpest rise since the first quarter of 2013.

The increase was primarily driven by employers forking out 3.4 per cent more in gross earnings while non-wage labour costs such as contributions to health and social insurance, climbed by 2.0 per cent.

The data for the first quarter was revised down to show the cost of work climbed by 2.8 per cent from January to March from an originally reported 3.2 per cent, the office said.

Eurozone figures for the second quarter are yet to be published, but data for the first quarter showed the cost of labour in the single currency bloc rose by 2.2 per cent in early 2015 - less than in Germany.

Other countries in the eurozone see higher German wages as a way to help them emerge from their economic troubles by giving Germans the incentive to buy more from their neighbours.

REUTERS