Nicosia, Cyprus. Cyprus recorded a 3.7 per cent year-on-year increase in hourly labour costs during the first quarter of 2026, according to Eurostat. The rise exceeded the 3.2 per cent increase in the euro area and was slightly above the 3.6 per cent increase in the European Union.
Labour cost components
According to Eurostat, hourly labour costs consist of two main components: wages and salaries, and non-wage costs.
Across the entire Cypriot economy, hourly wage costs increased by 3.8 per cent compared with the first quarter of 2025.
In the euro area, hourly wages and salaries rose by 3.4 per cent, while non-wage costs increased by 2.9 per cent. Across the EU, wages and salaries climbed by 3.7 per cent and the non-wage component rose by 3.2 per cent.
Business economy drives increase
The figures showed that Cyprus’ business economy was the main driver of labour cost growth.
Within the business economy, total hourly labour costs in Cyprus rose by 4.7 per cent year-on-year, Eurostat reported. Hourly wage costs in the business economy also increased by 4.7 per cent.
In contrast, the mainly non-business economy recorded significantly slower growth. In this segment, both total labour costs and wage costs increased by 1 per cent compared with the same period a year earlier.