As a result, the share of companies in the euro area reporting labour as a factor limiting production is now higher than ever before (Slide 10, right-hand side). Such a tight labour market at a time when firms are still adding jobs at a considerable pace is usually a good predictor of strong future wage growth.
Indeed, in those sectors where labour market conditions are tightest, such as the information and communication sector, compensation per hour was already expanding at an annual rate of nearly 4% in the final quarter of 2021.