Total labour costs per hour increased between the 1st and 2nd quarter 2011 by 6.3% in the economic activity of Wholesale and retail trade; repair, 6.1% in Construction, 4.6 in Manufacturing and 2.9 in Transport, storage and communication.

Total labour costs excluding bonuses remained unchanged from previous quarter in the economic activity of Wholesale and retail trade; repair. During the same period the total labour costs excluding bonuses increased by 1.0% in Transport, storage and communication and by 0.3% in Construction. Total labour costs excluding bonuses decreased by 1.2% in Manufacturing between the 1st and 2nd quarter.

From the same quarter of previous year, total labour costs rose in all economic activities. The increase ranged from 8.8% in Manufacturing to 14.1% in Construction.

A collective agreement between the Confederation of Icelandic Employers and the Icelandic Confederation of Labour (on behalf of its member unions), signed 5 May 2011, stipulates a general wage increase of 4.25% 1 June The agreement also stipulated a special lump sum payment of 50,000 ISK in May and a special holiday payment of 10,000 ISK in June 2011.

The labour cost index measures, on a quarterly basis, the development of labour costs per hour worked. The index is not adjusted to changes in working hours or labour structure.