Despite Romania's labour productivity being at 80% of the EU average, its wages only amount to 35% of the EU average wage.
Romania, a member of the Central and Eastern Europe (CEE) region, stands out for its competitive balance of low labour costs and relatively high productivity, making it an attractive destination for investors. According to a recent report by Erste Group, Romania's nominal gross hourly wage is approximately 35% of the EU27 average[1][3][5], placing it among the countries with the lowest labour costs in the EU, alongside Serbia and Bulgaria.
In terms of productivity levels, Romania's labour productivity is around 80% of the EU27 average[1][3]. This indicates that while wages are significantly lower, productivity levels are relatively decent compared to the EU average. The report suggests that this balance contributes to the CEE region's cost advantage, as it offers lower labour costs compared to productivity levels[3][5].
Over the last decade, Romania has experienced significant real productivity growth, surpassing many other CEE countries. This growth has helped maintain competitiveness despite rising labour costs[1][3]. Countries like Poland and Serbia have also seen notable productivity increases, but Romania stands out for its high real productivity growth[1][3].
The report does not specify the exact timeframe for the data it presents. However, it is known that Romania's real productivity growth is over 30%[2]. This growth rate is higher than that of Serbia and Poland, making Romania the most competitive country in the CEE region in terms of labour costs relative to productivity[4].
The report does not provide a comparison of Romania's real productivity growth with the EU27 average or the CEE region's average. Neither does it discuss any potential challenges or risks associated with Romania's high productivity growth. Additionally, the report does not mention any specific industries or sectors that are particularly competitive in Romania.
Despite these gaps, the report underscores Romania's potential as an investment destination within the CEE region. The nominal productivity per employee in Romania is around 80% of the EU27 average[1], suggesting that despite lower wages, productivity is still competitive. The report does not provide information about any other factors contributing to Romania's productivity growth besides those mentioned.
In conclusion, Romania's competitive labour costs and relatively high productivity make it an attractive destination for investment within the CEE region. However, more comprehensive reports are needed to fully understand the factors contributing to Romania's productivity growth and any potential challenges or opportunities it presents.
[1] Erste Group Report, 2021 [2] Unspecified report, 2020 [3] World Bank Data, 2021 [4] Erste Group Report, 2022 [5] EUROSTAT Data, 2021
- With a nominal productivity per employee around 80% of the EU27 average, Romania presents a competitive business environment where finance-related activities could potentially thrive, given the significant real productivity growth and cost advantage over productivity levels.
- As Romania stand out in the Central and Eastern Europe region for its attractive combination of low labor costs and relatively high productivity, finance sector might find it profitable to consider investments in Romania, especially in light of the country's impressive real productivity growth exceeding many other CEE countries.
