Total labour costs in the 4th quarter of 2008 increased in all economic activities compared with the previous quarter. The increase ranged from 8.1% in Transport, storage and communication to 5.3% in Construction. In the economic activity of Manufacturing the increase was 6.1% and 5.7% in Wholesale and retail trade; repair.

Total labour costs excluding bonuses increased between quarters by 3% in the economic activity of Transport, storage and communication, 2.7% in Construction and 1.8% in Wholesale and retail trade; repair. During the same period the total labour costs excluding bonuses decreased by 0.2% in the economic activity of Manufacturing.

Annual total labour costs rose by 9.3% in the economic activity of Construction, 7.5% in Transport, storage and communication and 5.6% in Manufacturing. During the same period the total labour costs excluding bonuses decreased by 3.3% in the economic activity of Wholesale and retail trade; repair.

Some collective agreements between trade unions and individual employers came into effect in the 4th quarter of 2008 in Manufacturing.

Employees may have a right to special wage supplements, in addition to other wages. Individuals who were employed at the end of November/beginning of December 2008 or worked at least 12 weeks during the calendar year, have the right to a December supplement, i.e. a proportional payment based on the worked period during 2008. The amount of the December supplement in 2008 is ISK 50,000 for the members of The Commercial Workers’ Union (VR) and for other members of Confederation of Labour (ASÍ) the amount was ISK 44,100. The supplement should be paid not later than 15 December.

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.