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UBS salary survey: Wages expected to rise by 1 percent in 2012
UBS is expecting base salaries in Switzerland to rise in this year's wage round by an average of 1.1 percent. This estimate is based on the latest UBS compensation survey.
According to the compensation survey conducted annually by UBS, nominal salaries in Switzerland are set to increase by 1.1% in 2012. Since UBS anticipates inflation of 0.2% for 2012, real wages will probably edge up 0.9% in the coming year. In retrospect, the picture in 2011 has been very similar. According to the UBS forecast, the annual inflation rate will average 0.3% this year. Survey participants said that nominal salaries increased by 1.5% in 2011. Consequently, Swiss employees are set to benefit from a 1.2% increase in real wages in the current year.
Economic situation makes for great uncertainty
The best pay deals this year are expected in the information technology and telecommunication industries, where a nominal salary increase of 2% is expected. The textiles industry and the consumer goods industry, not including the food or watch-making industry, are hovering at the bottom end, with no salary increases projected for the coming year. The automotive industry, the media, tourism and logistics industry, bank and insurance sector and the construction industry are offering average nominal wage increases of 1%. The nominal wage cuts applied in individual cases during the last economic crisis have not entered discussion anywhere, considering the industry average. The great uncertainty permeating companies is probably responsible for the moderate wage round. The strong Swiss franc, the economic slowdown in Europe and the US and the unresolved European debt crisis are making for increasingly gloomy prospects, even in Switzerland. That is why respondent companies expect the economy to stagnate and unemployment rates to rise over the next year.
Within the scope of the survey, companies were asked to assess the consequences of the revaluation of the Swiss franc on this year's wage settlements and on general business circumstances. Respondent companies report that export-oriented sectors, including tourism, are experiencing strong detrimental effects. Alongside a plunge in demand, particularly evident in tourism, exporters find themselves confronted with lower sales prices and tighter margins as a result of the Swiss currency's strength. The textile, machine, and materials industries especially register strongly negative consequences due to the franc's robustness. Accordingly, the vigorous currency is affecting the present year's round of wage settlements as well as the number of jobs placed on offer: In 32% of surveyed companies, the strong Swiss franc is having a negative to strongly negative influence on nominal wage negotiations. Another 25% indicate a direct relation between the strong currency and job reductions.
Table: Nominal salary trends in % according to the UBS compensation survey 2012
UBS has been conducting the annual salary survey since 1989. Some 359 companies, employer and employee representation associations in 22 sectors took part in the current survey held from September 21 to October 12, 2011. These sectors represent over two-thirds of Switzerland’s working population. From 1989 to 2010 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 2012 can be downloaded from:
UBS Compensation Survey 2012
Daniel Kalt, Chief Economist Switzerland
Tel. +41 44 234 25 60
Sibille Duss, Wealth Management Research
Tel. +41 44 235 69 54