A report by UBS predicts average Swiss salary growth of 1.9% in 2024, set against expected inflation of 2%. If correct, real pay will be slightly lower by year end than it was at the start of the year.
The bank said that rising health insurance premiums will mean many workers face a loss of purchasing power in the coming year. At the same time a robust labor market and excess savings are supporting consumption. While labour shortages have eased somewhat, recruitment difficulties remain widespread, it said.
The 1.9% average wage rise expected in 2024 follows one of probably 2.3% in 2023. In 2023, workers in some sectors will fare better than others. Workers in the public sector (+2.9%), watch making (+3.5%), IT (+2.8%), building materials (+2.5%), metals (+2.5%), electrical engineering (+2.5%), logistics (+2.5%) and health and social services (+2.5%) are all likely to earn wages that beat inflation in 2023. At the other end are workers in consumer goods (+2.3%), wholesale trade (2%), construction (2%), retail (2%), food (2%), media (2%) and textiles (1.5%).
The pattern is similar for 2024. Workers in media (+1%), food (1.5%), wholesale trade (1.5%), consumer goods (+1.8%), health and social services (+1.9%) and textiles (+1.9%) will likely receive pay rises that lag behind inflation (2% forecast). While all of the others will meet it, or in the case of the public sector workers exceed it (+2.2%).
Despite the loss of purchasing power, UBS economists expect high immigration, a robust labor market and excess savings to support consumption in Switzerland in 2024. A large number of households will likely draw on savings to cushion the burden of higher healthcare premiums, as well as rising rents and higher electricity prices. Although lower-income groups have little or no savings, their wages are expected to increase above average, according to the UBS Compensation Survey.
Longer term trends suggest potentially higher wages as Switzerland’s population ages and the pool or officially working age people shrinks.
UBS report (in English)