Labour costs in Portugal low by eurozone standards

The average hourly cost of labour in the eurozone, excluding agriculture and public administration, stood at €29.30 last year.

But there are significant differences among member states, starting at the €3.40 in Bulgaria to the top level of €40.10 in Denmark.

Portugal’s average €13.30 hourly cost was well below the eurozone average and was the fifth lowest in the region.

Cost refers to what an employer must pay for staff, including wages but also employer’s social contributions and taxes, sick pay and the like.

In neighbouring Spain, the average was €21.10 which was very close to the €21.80 in the UK.

In Portugal, as throughout the eurozone, costs varied considerably depending on the profession.

The financial and insurance sector cost the most, a whopping €35.60, with the lowest cost, €8.20, in the accommodation and food sector. See box below.

Portugal stood out as the country paying the most for finance and insurance workers compared to its average cost (167% above).

For the most part, Portugal was in line with its eurozone partners with the notable exception of having much lower labour costs in manufacturing.

This is bad news for manufacturing workers, but could help give Portugal a competitive edge for export.

Since 2008, the cost in Portugal rose by nearly 9%, of which about 6% was in wage costs and the remainder in social contributions and taxes.

Full-time workers in Portugal put in more hours than the eurozone average, working 1,680 hours per year against the average 1,629 hours.