In the second quarter of 2012 the total hourly labor cost in Bulgaria rose by 4.8%, compared to the second quarter of 2011.

These flash figures were released Monday by the Bulgarian National Statistics Institute, NSI.

The total hourly labor cost grew by 2.5% in industry and by 8.9% in services. In construction the total hourly labor costs decreased by 2.1%.

The breakdown by economic activities showed that the highest annual growths in total labor costs were recorded in 'Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles' - 16.3%, 'Other Service Activities' - 14.7% and 'Professional, Scientific and Technical Activities' - 10.8%, while the lowest annual growths were registered in 'Public Administration and Defense; Compulsory Social Security' and 'Financial and Insurance Activities' respectively 0.5% and 2.0%. The highest decrease in total labor costs was observed in 'Electricity, Gas, Steam and Air Conditioning Supply' by 3.9% and 'Construction' by 2.1%.

In the structure of the total labor costs, the wages and salaries costs per hour worked grew by 5.9% in comparison with a year earlier, while the other (non-wage) costs rose by 0.2%. Among the economic activities in the second quarter of 2012, compared to the second quarter of 2011, the growth rate of wages and salaries component ranged from (-3.9%) in 'Electricity, Gas, Steam and Air Conditioning Supply' to 17.4% in 'Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles'.

The Labor Cost Index is a short-term indicator measuring the quarterly development of hourly labor costs incurred by the employers as a result of engaging the labor work force. The quarterly survey on employees, hours worked, wages and salaries and other expenditures paid by the employer is the main source used for the labor cost index data calculation.

Labor cost index (LCI) is defined as a Laspeyres index of labor costs per hour worked. Since the first quarter of 2009 it is calculated broken down by economic activities at section level according to the new NACE Rev.2 classification and with a reference year 2008=100. Indices are based on Regulation (EC) 450/2003 of the European Parliament and of the Council according to which requirements Labor costs indices shall be provided separately for the following three labor costs categories:

Total labor costs (TOT), which includes wages and salaries paid by the employer in cash or in kind, employers' actual and imputed social contribution plus taxes regarded as labor costs;

Wage and salary costs (WAG) covers wages and salaries paid in cash or in kind;

Labor costs other than wages and salaries (OTH – non-wage costs) include the employers' actual and imputed social contribution plus taxes regarded as labor costs;