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UBS compensation survey: Nominal wages expected to rise by 1.6% in 2011

Zurich / Basel | | Media Releases Switzerland

The latest UBS compensation survey points to a significant rise in nominal salaries in 2011. In this year's wage round, a rise of 1.6% in average base salaries is expected.

Next year, nominal salaries are expected to increase by 1.6%. UBS anticipates inflation of 0.9% in 2011. This means a 0.7% rise in real wages in the coming year. In retrospect, a modest real wage increase also resulted in 2010. According to the UBS forecast, the average annual inflation rate will be 0.7% this year. The companies surveyed said that they increased nominal salaries by 1.1% in 2010. Consequently, Swiss employees will be able to benefit from a 0.4% increase in real wages in the current year.

Need to catch up after the crisis
Several industries will be granting increases in nominal salaries of 2% in 2011. The electronics and metal industries, information technology and telecommunication, the automotive industry, as well as health care and social services are at the top of the sectoral comparison. At the other end of the spectrum is the public sector, tourism, the non-food sector of the consumer goods industry, as well as the watch-making and textiles industries with an average salary increase of 1%.

Wage increases were lower last year, which was marked by the economic crisis. In some cases there were none at all. Following the surprisingly dynamic recovery seen in the Swiss economy in 2010, there is now a considerable need to catch up in many areas. Especially in the metal and electronics industries and in the construction sectors, the salary increases are expected to be significantly higher than last year.

Although exchange rate developments have caused some unrest in more export-oriented segments, companies are optimistic about the future and expect a moderate economic upturn next year. UBS expects gross domestic product to grow by 2.3% in 2011.

The survey participants expect a further drop in the unemployment rate. UBS also shares this assessment and expects the average annual unemployment rate to fall to 3.4% in 2011, from 3.9% for the current year.

With regard to the development in the employment market, the free movement of persons between Switzerland and the EU is an important mainstay of economic growth in Switzerland: over 60% of the companies surveyed claimed to have benefited from the free movement of persons in the past three years when recruiting new employees. Here, the extended recruitment opportunities primarily help in the recruitment of highly qualified employees, although the percentage of highly qualified employees has fallen compared to 2007. Some 70% of the companies cite the lack of skilled personnel as the reason for recruiting European employees, while cost considerations, language skills and willingness to work only rarely played a role.

UBS has been conducting the annual salary survey since 1989. Some 315 companies, employer and employee representation associations in 22 sectors took part in the current survey held from September 17 to October 18, 2010. These sectors represent over two-thirds of Switzerland's working population. From 1989 to 2009 the average wage increases assessed by the survey diverged a mere 0.31 percentage points from the official average salary trends (nominal wage index and collective labor agreements) published by the Federal Office of Statistics (BFS).

The detailed results of UBS's salary survey for 2011 can be downloaded from: www.ubs.com/wmr-swiss-research.

Table: Nominal salary trends in sectors of the Swiss economy in % according to the UBS salary survey 2011

Salary development 2010

Expected salary development 2011

Textiles

0.5%

1.0%

Watches

0.7%

1.0%

Non-Food

0.9%

1.0%

Tourism incl. culture, sport and education

1.0%

1.0%

Public sector

1.0%

1.0%

Food

1.0%

1.1%

Media

1.0%

1.1%

Materials and building materials

1.0%

1.5%

Machinery

1.0%

1.5%

Wholesale trade

1.0%

1.5%

Banks and insurance

1.5%

1.5%

Retail trade

1.5%

1.5%

Energy, utilities and waste disposal

1.0%

1.6%

Chemicals & pharmaceuticals

1.1%

1.7%

Construction and architecture

1.0%

1.8%

Logistics

1.3%

1.8%

Corporate services

1.7%

1.8%

Metals

0.1%

2.0%

Electrical engineering

0.7%

2.0%

Automobile sector

1.3%

2.0%

IT services and telecommunications

1.3%

2.0%

Health and social services

1.5%

2.0%

Switzerland

1.1%

1.6%

Contacts:

Daniel Kalt, Chief Economist Switzerland
Phone: +41-44-234 25 60

Carla Duss, Research Switzerland
Phone: +41-44-234 21 19

Cäsar Lack, Research Switzerland
Phone: +41-44-234 44 13