Wage costs rose 1.8% in the first quarter but confirmed a slowdown in increases.

The cost per hour worked increased by 1.8% year-on-year in the first quarter, a further increase that brings the statistics closer to their fourth consecutive year of increases but confirms that the moderate increases that began last year continue.

Provisional data from the Harmonized Labour Cost Index (HLCI) published this Tuesday by the National Statistics Institute (INE) indicate that the hourly labour cost series (what the company pays per employee) has accumulated 15 quarters of growth , since the third quarter of 2021, when the series recovered from the second-quarter dip that occurred in the midst of the de-escalation of the pandemic.

The activities with the largest annual increases in labor costs were Electricity and Gas Supply (5.9%), and Water and Waste (5.1%), while the largest decrease was in Public Administration and Defense (1.7%).

Wage costs (the total expenditure per worker that employers allocate to salaries) follow the same pattern, with a 1.8% increase in the original series (which does not correct for potential calendar effects on the statistics) and 15 quarters of uninterrupted increases.

Activities with The largest year-on-year increases in hourly wages between January and March were in the areas of water supply, sanitation, waste management and decontamination (+5.9%) and electricity, gas, steam and air conditioning (+5.6%), while the largest decrease in cost per hour worked was recorded in Public Administration and Defence (-1.6%). These increases reflect part of the 4.4% increase in the interprofessional minimum wage (SMI) to €1,184 gross per month in 14 installments approved in February, but with retroactive effect from January.

Other costs (contributions, benefits, compensation, etc.) also increased by 1.8%, according to data from the INE (National Institute of Statistics and Census). Excluding extraordinary payments and late payments, labor costs grew by 1.5% in the first quarter of the year.

On a quarterly basis, the cost per hour worked fell by 8.9%, primarily due to the lower proportion of extra payments compared to the final period of 2024, when the Christmas bonus is received. However, this increase also marks the 15th consecutive quarterly increase.