Relative Unit Labour Costs Stabilised in 2025

In 2025, unit labour costs in Austrian manufacturing rose only slightly year on year (+0.5 percent), after sharp increases of 11.7 percent and 9.6 percent in 2023 and 2024. Relative unit labour costs thus improved versus the trade-weighted average of all trading partners (–2.6 percentage points), versus EU trading partners (–3.1 percentage points) and versus Germany, Austria's most important trading partner (–2.7 percentage points). This development was driven by a marked recovery in productivity (+3.4 percent) combined with distinctly weaker growth in compensation per employee (+3.9 percent after +6.4 percent in 2024). Over the past five years, unit labour costs in domestic manufacturing grew at the same pace as in Germany and by 0.4 percentage points p.a. faster than in Western Europe, but by 0.7 percentage points p.a. more slowly than the trade-weighted average of all trading partners. Owing to government support measures during the COVID-19 pandemic and to cushion high inflation, results for the past five years should still be interpreted with caution.