Cyprus wage growth near EU average

Cyprus saw hourly wage costs rise by 3.5 per cent in the third quarter of 2025, according to Eurostat figures, reflecting continued labour cost pressures in line with broader trends across the euro area and the European Union.

Eurostat said hourly labour costs increased by 3.3 per cent in the euro area and by 3.7 per cent in the EU during the third quarter of 2025, compared with the same period a year earlier.

The data, published by the EU’s statistical office, show that labour costs continue to rise across Europe as employers face higher wage and non-wage expenses.

Labour costs are made up of two main components, wages and salaries and non-wage costs, which include employers’ social contributions and other related expenses.

In the euro area, hourly wages and salaries increased by 3.0 per cent in the third quarter of 2025 compared with a year earlier.

Over the same period, non-wage costs in the euro area rose at a faster pace of 4.0 per cent.

Across the European Union, hourly wages and salaries recorded an annual increase of 3.5 per cent in the third quarter of 2025.

Non-wage costs in the EU rose by 4.2 per cent compared with the same quarter of the previous year, indicating sustained upward pressure on total labour costs.

Looking at economic activity, hourly labour costs in the euro area increased by 3.1 per cent in the mainly non-business economy and by 3.3 per cent in the business economy.

Within the euro area’s business economy, labour costs rose by 3.3 per cent in industry, 4.3 per cent in construction and 3.2 per cent in services.

In the European Union as a whole, hourly labour costs increased by 3.4 per cent in the mainly non-business economy and by 3.8 per cent in the business economy.

Industry recorded a 3.7 per cent rise in labour costs across the EU, while construction saw a sharper increase of 4.7 per cent and services rose by 3.7 per cent.

At sector level, the strongest increases in hourly wage costs in the EU were seen in other service activities, which rose by 4.5 per cent.

Construction and professional, scientific and technical activities both recorded increases of 4.3 per cent in hourly wage costs.

The lowest annual increase in hourly wage costs was observed in electricity, gas, steam and air conditioning supply, where costs rose by 2.5 per cent.

Non-wage labour costs rose most sharply in the construction sector, increasing by 5.8 per cent across the EU.

Other service activities followed with a 5.6 per cent rise in non-wage costs, while real estate activities recorded an increase of 5.5 per cent.

The smallest rise in the non-wage component was recorded in mining and quarrying, at 2.5 per cent.

Across individual countries, the largest increases in hourly wage costs for the whole economy were recorded in Bulgaria at 12.4 per cent, Lithuania at 9.7 per cent, Croatia at 9.1 per cent and Hungary at 8.8 per cent.

The lowest increases were seen in France at 1.3 per cent, Slovenia at 1.6 per cent, Spain at 2.0 per cent, Austria at 2.1 per cent and Italy at 2.4 per cent.

Malta was the only EU member state to record a decline in hourly wage costs, with a decrease of 1.4 per cent.

Against this backdrop, Cyprus’ 3.5 per cent increase places it close to the EU average, highlighting moderate but persistent labour cost growth that continues to shape conditions for employers and workers alike.