Source: KOF Swiss Economic Institute
Zurich, 08/17/2026, 9 AM
In July, private-sector firms in Switzerland anticipated that nominal
wages would rise by an average of 1.2 per cent over the next year.
Although wage expectations are slightly lower than they were a year ago
in almost all sectors, if the inflation forecast by the KOF Institute
materialises, this wage increase should still be sufficient to deliver
solid real wage growth by historical standards.
The KOF Institute surveyed around 8,000 private-sector firms on their
wage forecasts in July as part of its quarterly economic surveys.
Roughly 3,500 businesses responded to the relevant question. According
to the survey, companies expect to see an average wage increase of 1.2
per cent in a year’s time. This is 1.3 per cent lower year on year. The
outlook for nominal wage growth is thus continuing the downward trend
observed since the survey began in 2022. Forecasts are now centred
around 1 per cent, with half of firms anticipating wage growth of
between 0.6 per cent and 1.4 per cent. Far fewer companies than a year
ago are planning wage rises of 2 per cent or more, whilst the median
remains unchanged at 1 per cent.
The decline in wage expectations is likely to reflect two main
developments. On the one hand, the situation on the Swiss labour market
has been steadily deteriorating since 2023: seasonally adjusted
unemployment rose slightly, and the shortage of skilled workers has
eased further. In 2025, employment grew only marginally. On the other
hand, consumer price inflation fell again last year and was at times
close to zero. Although inflation has since risen slightly again due to
the war in Iran, there is nevertheless less need this year to adjust
wages in line with past inflation.
Real wage growth could be above average in 2027
Real wage growth – that is, wage growth after adjusting for inflation –
is crucial for the purchasing power of wage earners. The firms surveyed
also indicated what level of inflation they are anticipating over the
next twelve months. As in previous surveys, they expect inflation to be
higher than that forecast by the economic research institutes: whilst
the KOF Institute, for example, forecasts inflation of 0.5 per cent for
the next twelve months, businesses are anticipating 1.1 per cent. They
reckon that wage increases are therefore likely to be just enough to
offset price rises, so real wages would essentially stagnate. If, on the
other hand, the KOF Institute’s latest forecast proves accurate, the
expected nominal wage growth of 1.2 per cent would result in a real
increase of around 0.7 per cent. This would be a respectable figure by
historical standards: real wages according to the Swiss Wage Index rose
by an average of 0.2 per cent per year between 2014 and 2023.
Construction sector expecting the highest wage growth
There are significant variations between sectors. Firms in the retail
trade (0.8 per cent), wholesale trade (0.9 per cent) and in the
manufacturing and financial sectors (1.0 per cent each) are forecasting
comparatively low nominal wage growth. The sharpest year-on-year
declines in forecasts within the financial sector were seen in banking
(from 1.4 per cent to 0.8 per cent) and in the chemical and
pharmaceutical industries (both from 1.5 per cent to 1.0 per cent) – a
trend that is likely to reflect the particular challenges facing these
sectors. The pharmaceutical industry is under pressure from the US
government to lower its prices; the chemical industry is feeling the
impact of US trade tariffs and the rise in energy prices resulting from
the war in Iran; and, in the banking sector, the ongoing integration of
Credit Suisse into UBS could dampen wage growth.
The construction sector constitutes a clear outlier here as it is the
only sector in which companies are forecasting higher wage growth – both
in nominal and real terms – than they did a year ago, now anticipating a
nominal increase of 2.0 per cent (last year: 1.6 per cent). 90 per cent
of construction firms expect to see wage growth of at least 1 per cent,
whilst in all other sectors at least one in ten businesses reckons that
wages will not rise at all. One reason for this optimism could be the
ongoing shortage of skilled workers coupled with strong order books in
the construction sector. The nominal wage growth of 1.4 per cent
expected in the hospitality sector is above average. Compared with
previous surveys, however, forecasts have fallen significantly here as
well. Hospitality was still leading all sectors in mid-2024 with
projected wage growth of 2.6 per cent.
The KOF Institute’s wage surveys
The KOF Institute has been collecting data on wage forecasts of
private-sector firms in Switzerland every quarter since 2022. These
surveys are conducted as part of the quarterly Business Tendency
Surveys, in which the KOF Institute polls around 8,000 Swiss firms. The
surveys include a quantitative question on how respondents’ expect gross
wages in their businesses to evolve over the next twelve months.
Analysis of these responses is particularly interesting in July, as this
month’s question gauges firms’ expectations regarding the forthcoming
round of wage negotiations. Individual companies’ responses are
aggregated using employment weights. The survey also asks businesses
about their forecasts for consumer price inflation over the next twelve
months. By combining these wage and price responses, it is therefore
possible to draw conclusions about the real wage growth that companies
are anticipating. Given the large sample size, the data also enables
reliable conclusions to be drawn about the sectors in which firms expect
to see higher wage growth.