Total labour costs in the 3rd quarter of 2008 increased by 3.6% in the economic activity of Construction and 0.4% in Manufacturing compared with the previous quarter. During the same period the index for total labour costs decreased by 1.6% in Transport, storage and communication and 4.6% in the economic activity of Wholesale and retail trade; repair.

Total labour costs excluding bonuses increased between quarters by 4.0% in the economic activity of Construction, 1.9% in Manufacturing and 1.6% in Transport, storage and communication. During the same period the total labour costs excluding bonuses decreased by 3.3% in the economic activity of Wholesale and retail trade; repair.

Annual increases in total labour costs range from 0.3% in Wholesale and retail trade; repair to 11.9% in Construction. In the economic activity of Manufacturing the increase was 5.8% and 8.6% in Transport, storage and communication.

The Labour cost index in 3rd quarter 2008 reflects the effects of a statement made in relation to the collective agreement between the Confederation of Icelandic Employers (SA) and the Icelandic Confederation of Labour (ASI), on behalf of its member unions, signed on 17 February 2008.  According to the statement 0.13% of the wages of employees in member unions are to be paid into a Rehabilitation fund from 1 June 2008. Employers are allowed to pay for all employees in the rehabilitation fund if they prefer.

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.