Cyprus recorded a notable increase in hourly labour costs in the first quarter of 2025, outpacing the European Union and Eurozone averages, according to preliminary figures published by the Statistical Service of Cyprus and Eurostat.

Hourly labour costs in Cyprus rose by 4.8% year-on-year compared to Q1 2024. This rise applies equally to both components of labour cost: wages and salaries per hour, which increased by 4.8%, and non-wage costs per hour, which climbed by 4.9%.

When adjusted for seasonal variations, the total hourly labour cost rose by 1.3% from the previous quarter. Wages and salaries grew by 1.3%, while non-wage costs rose by 1.5%.

The increase in Cyprus was steeper than in both the Eurozone and the EU. In the Eurozone, hourly labour costs rose by 3.4%, while in the EU they increased by 4.1% year-on-year.

In terms of sectoral dynamics, the business economy in the Eurozone saw a 3.8% rise in costs, while the non-business sector registered a smaller 2.5% increase. Services and construction led the way with increases of 4.3% and 4.7% respectively. Across the EU, construction saw a sharper 5.2% increase.

The largest annual labour cost increases were recorded in:

• Professional, scientific, and technical activities (+7.4%)

• Real estate activities (+6.1%)

• Water supply, sewerage, and waste management (+5.8%)

Meanwhile, EU member states such as Romania (+16.1%), Croatia (+13.5%), and Bulgaria (+13.0%) experienced the most dramatic increases in wage costs. In contrast, Malta (+1.6%) and France (+1.9%) saw the lowest.

Cyprus also saw an uptick in job vacancies during the first quarter of 2025. The number of unfilled positions reached 13,524, up 2.2% compared to the same period in 2024 and 4.1% higher than the previous quarter.

The job vacancy rate stood at 2.9%, slightly up from 2.8% in Q4 2024 but just below the 3.0% rate recorded in Q1 2024. Sectors with the highest vacancy rates included:

• Arts, entertainment, and recreation (6.9%)

• Accommodation and food service activities (5.2%)

• Transportation and storage (4.5%)

In comparison, the Eurozone's vacancy rate fell to 2.4%, and the EU’s to 2.2%, both showing a downward trend year-on-year.

Countries with the highest vacancy rates in the EU were the Netherlands (4.2%), Belgium (4.1%), and Austria (3.6%), while the lowest were observed in Romania (0.6%), Poland (0.8%), and Bulgaria and Spain (0.9%).