Factor Costs for Business


This key question attempts to capture the main aspects of the availability and cost of production factors, which include labour, land, fixed capital, raw materials and energy but also the “social capital” represented by human capital and by institutional, natural infrastructural and cultural resources. It is logical that countries which are delighted with a higher amount of usable resources have greater chances to achieve a higher level of total income and growth.
Inputs have a direct impact on the prices which are perceived by the customers. Different prices or availability of resources in one country can lead to different prices in these countries. In the following, a table is presented which summarizes the factors which more significantly affect prices:

  • Input Factor: What causes the effect of this input factor?
  • Labour: Wages, overall labour costs, wage differentials can explain differences in prices in different regions
  • Energy, Raw Materials: Cost of import for those goods and services acquired outside the EU, production costs, for EU produced goods and services
  • Capital Costs: Credit capital (interest rates), equity capital (remuneration of services  supplied by stockholders and by managers)

This text is for information only and is not designed to interpret or replace any reference documents.

Guiding Question

How does the policy option affect the cost or availability of essential inputs (raw materials, machinery, labour, energy etc.)?

Relevant Policies

Europe 2020
For more detailled information, please enter http://europa.eu/pol/enter/index_en.htm



Web Resources

Further sources of data

European Flagship Initiatives: http://cordis.europa.eu/fp7/ict/programme/fet/flagship/
Resource Strategy/Policy: http://ec.europa.eu/resource-efficient-europe/

Further sources of information

Eurostat indicators

  • Unit Labour Cost Growth
  • Tax rate on low wage earners
  • Electricity Prices by type of users
  • Gas prices by type of users

available under http://epp.eurostat.ec.europa.eu/

Other official indicators

Labour: http://www.oecd.org/els/ and http://www.oecd.org/std/labourstatistics/