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UBS salary survey: nominal wages expected to rise by 0.8%

Zurich / Basel | | Media Releases Switzerland

The latest UBS salary survey points to a slight rise in nominal salaries in 2010. Following this year's wage round, average base salaries should rise by 0.8% in Switzerland.

UBS expects an inflation rate of 0.7% in the coming year, resulting in no change for real wages in the current, difficult environment. The wage increases of 2009 were actually more positive: consumer prices decreased this year by 0.4%, while surveyed companies reported that nominal salaries increased by 2.2%. Thus, Swiss workers enjoyed above-average growth in real wages of 2.6% in 2009.

Largest wage increases among service providers
Among various sectors, service providers should do best in 2010, with an average salary increase of 1.5%. Employees in the food, public and IT sectors, among others, will also enjoy above-average salary increases. Meanwhile, no increases are expected for workers in watchmaking, the media, textiles and non-food consumer goods.

The decline in consumer prices this year provided a remarkable backdrop for the latest salary round. However, given the sharp economic decline and rising unemployment, many companies will not raise wages in 2010. In fact, nominal wage decreases are likely in some sectors, including textiles, machine engineering and the media, among others. According to the UBS survey, potential or decided salary cuts will amount to an average of about 5.0% for 2010, typically applied for one year only.

That said, many companies see a silver lining to the economic woes and expect the recovery to strengthen in the coming year. UBS also forecasts growth of 1.7% in 2010, following a decline of 1.5% this year. But because the labor market lags behind developments in the economic cycle, unemployment looks likely to increase from its present rate of 4.0% to an average of 5.0% next year.

UBS has conducted its annual salary survey since 1989. Some 250 companies, employer and employee associations in 22 sectors took part in the current survey, conducted from 1-26 October.

All together, the surveyed companies employ more than two-thirds of Switzerland's working population.

From 1989 to 2008, average wage increases projected by this survey diverged a mere 0.34 percentage points from the official data published by the Federal Office of Statistics (BFS).

The detailed results of UBS's salary survey for 2010 can be downloaded at: www.ubs.com/wmr-swiss-research.

Table: Nominal wage increases in selected sectors in Switzerland (in %) according to the UBS salary survey

Effective increase 2009

Forecast 2010

Textiles

1.7%

0.0%

Media

1.7%

0.0%

Non-food

2.0%

0.0%

Watches

3.0%

0.0%

Tourism

2.0%

0.3%

Machinery

2.0%

0.5%

Energy, utilities and waste disposal

2.8%

0.5%

Metals

2.5%

0.5%

Electrical engineering

1.5%

0.7%

Retail trade

2.5%

0.8%

Pharmaceuticals

3.0%

0.8%

Materials and building materials

2.0%

0.9%

Chemicals

1.5%

1.0%

Construction and architecture

2.0%

1.0%

Banks and insurance

2.0%

1.0%

Wholesale trade and logistics

2.0%

1.0%

Automobile sector

2.0%

1.0%

IT services and telecommunications

2.4%

1.0%

Health and social services

2.0%

1.0%

Public sector

2.7%

1.0%

Food

2.4%

1.2%

Corporate services

2.5%

1.5%

Total

2.2%

0.8%

Contact:
Daniel Kalt, Head Economic Research
Tel. +41-44-234 25 60

Carla Duss, Economic & Swiss Research
Tel. +41-44-234 21 19