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Improvement in Relative Unit Labour Costs in 2022

Author

Listed:
  • Benjamin Bittschi

    (WIFO)

  • Birgit Meyer

    (WIFO)

Abstract

In 2022, unit labour costs in Austrian manufacturing increased by 2.2 percent year-on-year. This implies a significant improvement in relative unit labour costs, both compared with the weighted average of all trading partners (–3.3 percentage points) and with EU trading partners (–1.7 percentage points). Relative unit labour costs also improved compared with Germany, the most important trading partner (–1.4 percentage points). This development vis-à-vis our trading partners is being driven by a weaker increase in labour costs coupled with a stronger rise in productivity. The favourable exchange rate development had a supporting effect. When interpreting the data, long-term comparisons still need to take into account country-specific differences in the COVID-19 aid measures. The data for 2022 may also have been distorted by the different international approaches to cushioning high inflation.

Suggested Citation

  • Benjamin Bittschi & Birgit Meyer, 2023. "Improvement in Relative Unit Labour Costs in 2022," WIFO Reports on Austria, WIFO, issue 14, October.
    • Handle: RePEc:wfo:repoau:y:2023:i:14
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    File URL: https://www.wifo.ac.at/wwa/pubid/71176
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    References listed on IDEAS

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    1. Carlin, Wendy & Glyn, Andrew & Van Reenen, John, 2001. "Export Market Performance of OECD Countries: An Empirical Examination of the Role of Cost Competitiveness," Economic Journal, Royal Economic Society, vol. 111(468), pages 128-162, January.
    2. Benjamin Bittschi & Birgit Meyer, 2022. "Verbesserung der Lohnstückkostenposition im Jahr 2021," WIFO Monatsberichte (monthly reports), WIFO, vol. 95(10), pages 663-676, October.
    3. Dosi, Giovanni & Grazzi, Marco & Moschella, Daniele, 2015. "Technology and costs in international competitiveness: From countries and sectors to firms," Research Policy, Elsevier, vol. 44(10), pages 1795-1814.
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