The salary survey conducted by UBS Global Wealth Management indicates that real wages in Switzerland are expected to increase in 2025 due to higher wages and a decrease in inflation.
The survey encompassed 345 Swiss companies and revealed an average planned salary increase of 1.4 percent for the upcoming year. This anticipated wage growth is expected to result in a real wage increase of approximately 0.7 percent, thanks to a forecasted inflation rate of 0.7 percent.
The sectors with the highest wage increases include IT and telecommunications, energy, utilities, and waste disposal, with expected raises around 2 percent. The chemical and pharmaceutical industry anticipates a 1.7 percent increase. However, some sectors such as the media industry, building materials sector, and retail trade are projected to experience lower wage growth at just 1 percent.
Despite this, the anticipated inflation rate means that even these modest increases will contribute to a rise in real wages and purchasing power. Rising health insurance premiums may offset some of the gains in purchasing power, leading to less disposable income for many Swiss households.
The UBS report emphasizes the importance of considering broader economic factors that influence household finances. The expected real wage increases could still support consumption in the Swiss economy, but rising health insurance costs and a moderate increase in unemployment may temper the overall impact of wage growth on consumer spending.
The anticipated decline in inflation, driven by falling electricity prices and a decrease in the reference interest rate, is unlikely to create inflationary pressure from rising wages. This suggests a more stable economic environment that could further support consumer confidence and spending.
A stable inflation rate, combined with rising real wages, may enhance the purchasing power of consumers and contribute to a more robust economic recovery. However, the issue of rising health insurance premiums remains a critical factor that could dampen the positive effects of wage growth on household finances.
In summary, the interplay of rising health insurance costs and broader economic conditions will be pivotal in determining the actual impact of real wage growth on consumer purchasing power and overall economic activity in Switzerland. The findings from UBS's salary survey provide valuable insights into the evolving landscape of wages and inflation in the country, highlighting both opportunities and challenges for households and the economy.