Spain is the European nation the place labor prices are rising the least

Labor prices in trade, development and companies elevated by 2.2% in our nation, half that of the European common Only Greece registered a drop in labor prices, which embody wages and social safety contributionsThe costs at which Spanish firms promote their services and products rose by 3.7%, additionally beneath the EU common

Spain is the European nation wherein labor prices are rising the least this 12 months 2022. Data from the European statistical workplace, Eurostat, mirror this moderation on the facet of the labor issue within the face of the present inflationary episode. Wages and social safety contributions within the trade, development and companies sectors grew at a charge of two.2% within the second quarter, half the European common. Only Greece registered a decrease determine: labor prices fell on this nation in comparison with final 12 months.

The result’s consistent with different labor market figures. In November, the wages agreed upon within the settlement rose a mean of two.7%, greater than 4 factors beneath the newest CPI, whose interannual charge eased in November to six.8%.

“Companies are resisting elevating wages and in collective bargaining the unions should not getting giant will increase,” says an skilled. That Spain is on the backside of the labor value survey shouldn’t be a shock, however fairly a affirmation of this moderation that has been noticed each month. We should additionally keep in mind that proper now our nation has the bottom inflation charge within the euro zone.

The will increase in wage prices are led by international locations similar to Bulgaria, Lithuania or Poland, the place costs register will increase of 15%. In Germany labor prices rose by 4.7%, the identical as in Portugal. More modest are the will increase in France (3.2%) and Italy (2.9%).

And the businesses?

The figures for each wage prices and collective agreements verify the lack of buying energy that employees are struggling, the biggest because the monetary disaster. The query that has been within the air for a lot of months is: what in regards to the firms? Are additionally they dropping or have they been capable of switch the rise in vitality prices to their costs and preserve their profitability?

Wages are rising much less in Spain, however firm costs are additionally rising beneath common.

This could be seen by what is named the GDP deflator — the a part of financial development that is because of purely rising commodity costs. Spanish firms are promoting their items and companies 3.7% costlier than a 12 months in the past, in response to figures for the third quarter of the 12 months. It can be one of many lowest throughout the EU and beneath common.

Again, in international locations with increased inflation, the deflator can be increased. France and Italy, throughout the giant European economies, current a decrease determine than ours.

If firms elevate their costs (3.7%) greater than wages improve (2.7% in agreements or 2.2% labor prices), does it imply that they’re rising their income? Only with this knowledge it’s tough to know as a result of we should additionally bear in mind the rise in vitality prices and uncooked supplies, for instance. “The indisputable fact that they rise greater than wages is a mirrored image that firms are clearly reluctant to lose margins within the face of a rise within the worth of vitality,” says an economist.

But to actually know if they’re the identical, worse or higher than earlier than, you must analyze the margins: what proportion of what you promote goes to revenue. The Bank of Spain (BdE) retains observe of this variable via a survey of firms. It shouldn’t be excellent and is biased in the direction of medium and enormous companies. What the newest knowledge as much as the third quarter present is that margins — the profitability of companies — have risen in current months.

To be on line 100 is to be like in 2019. It could be seen how virtually all sectors have exceeded that stage to this point this 12 months. In complete common, the enterprise margins that the BdE measures are already higher now than earlier than the covid. By sectors, nonetheless, the outcomes are heterogeneous and Commerce and Hospitality stand out, the place profitability grows essentially the most (and the one hardest hit by the pandemic).

Experts are very insistent on highlighting the big divergences by sectors, actions and even throughout the identical enterprise. The vitality disaster, uncooked supplies and transport bottlenecks have impacted inconsistently. For each the corporate and the employee, the inflationary episode has not ended. That is why it is going to be essential to hold observe of all these indicators to see whether it is attainable to succeed in a roughly balanced distribution of the rise in the price of residing.