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2008 UBS salary survey: 2008 wage round - real 1.4% increase expected

Zurich / Basel | | Media Releases Switzerland

According to the latest UBS wage survey, nominal wages are to increase by 2.4% in 2008 following this year's wage negotiations. As UBS anticipates an inflation of 1% for 2008, there will be a 1.4% real increase in base salaries. According to the firms surveyed, nominal wages rose by 2% in 2007. UBS estimates inflation to average 0.7% in the current year, which translates into a 1.3% rise in real wages for employees this year. These are the main results of the 19th UBS salary survey, which is carried out annually among enterprises in 19 sectors within Switzerland.

Largest wage increases expected for pharmaceuticals and chemicals
The largest wage increases this year are expected in the pharmaceutical and chemical industry (2.8%) as well as in cantonal governments and construction, both at 2.7%. Expectations of firms surveyed in the IT and metal and engineering sectors are following suit, at 2.6%, while firms in the energy, insurance, telecoms and banking sectors all anticipate an increase of 2.5% in nominal wages. The most modest wage increases are expected in the textile industry (1.3%), and in media as well as printing and graphics (1.8%). These figures are based on base salaries and do not include performance-related, non-guaranteed wage components (bonus payments).

About 75% of the firms surveyed have a system of bonus payments. About 31% of those surveyed in manufacturing and 26% of those in services anticipate higher bonuses for 2008. By contrast, about 7% of manufacturers and 22% of service providers foresee decreasing bonus payments. The increase in total wages should outpace the 2.4% increase in base salaries.

Free movement of persons helps to remedy labour shortages
With regard to the free movement of persons, numerous companies stated that being able to recruit workers abroad helped them get past shortages on the Swiss labour market. They primarily hired well-qualified workers from the EU region. According to the survey respondents, the flow of workers from abroad had scarcely any effect on salaries in Switzerland.

Positive outlook for private consumption
The survey respondents expressed ongoing optimism regarding future economic development, with most assuming the upturn would continue. This is reflected in the expectations for growth in staffing: Of the companies surveyed, 49% plan to increase their headcount, while only around 15% expect to reduce staff numbers. An additional increase in employment and anticipated growth in real wages will have a favourable effect on real disposable household income and should support consumer spending in the next few months. Overall, UBS anticipates a real 2.0% growth in private consumption for the coming year.

UBS conducts this salary survey annually. This year's survey was carried out between September 5 and October 23, 2007 at around 100 companies and employer and employee associations in 19 sectors. These sectors employ 64% of the working population in Switzerland. Between 1990 and 2006, wage increases estimated by the survey deviated by just 0.26% on average from the official wage figures published by the Swiss Federal Statistical Office (SFSO).

The detailed results of the 2008 UBS wage survey are available online at www.ubs.com/research.

Contact:

Daniel Kalt, Head of Economic & Swiss Research
Tel. +41 44 234 25 60

Felix Brill, Economic & Swiss Research
Tel. +41 44 234 35 54

Nominal wage increases in selected Swiss sectors (in %)

Actual development in 2007 Median

Results of 2008 wage survey Median

Chemicals, Pharmaceuticals

2.1

2.8

Cantons

2.2

2.7

Construction

1.6

2.7

Machinery, Electronics, Metals

2.3

2.6

IT Services

2.0

2.6

Energy

2.5

2.5

Banking

2.5

2.5

Telecommunications

2.0

2.5

Insurance

2.4

2.5

Watches

2.2

2.3

Retail Trade

2.3

2.2

Transport

2.0

2.1

Hotels, Restaurants

1.8

2.0

Automotive

2.0

2.0

Food, Beverages

1.4

2.0

Federal Government

1.2

2.0

Printing, Graphics

1.1

1.8

Media

1.3

1.8

Textiles, Garments

2.5

1.3

Overall economy

2.0

2.4