Labor market Bleak economic outlook and US tariffs slow wage growth
Wages in Switzerland are likely to rise significantly less in 2026 than in the previous year. In addition to significantly lower inflation, concerns about the economy and US tariffs are holding back wage growth.
05.11.2025, 10:11
SDA
In nominal terms, wages in Switzerland are likely to rise by an average of 1.0% in the coming year, compared to 1.4% in the previous year, according to the "UBS Wage Survey" published on Wednesday. Almost 400 companies from 22 sectors were surveyed, representing around 85 percent of the workforce.
According to the survey, wage increases are taking place in all sectors. According to the survey, the highest increases are expected in the IT sector (+1.7%), as in the previous year. In contrast, the watch industry (+0.4%) will be at the bottom of the list. Companies in export-oriented sectors tended to plan lower wage increases than those with a domestic focus.
Lower inflation
One of the main reasons for the more subdued wage growth is the significant fall in inflation. According to the UBS economists, this led to wages rising by a high 1.2 percent in real terms - i.e. adjusted for inflation effects - in the current year 2025. This has largely compensated for the loss of purchasing power suffered since 2022.
The UBS experts expect real wage growth to slow to 0.5% in 2026. With the exception of the watch and jewelry and consumer goods sectors, all sectors are likely to see real wage increases. Export-oriented sectors are planning lower real wage increases (+0.2%) than domestic-oriented companies (+0.5%).
In the survey, companies cited the gloomier economic outlook and the US tariffs as the main reasons for their restraint. Around half of the companies expect the economy to stagnate and the unemployment rate to rise. The outlook for export-oriented companies is particularly gloomy, with as many as a quarter expecting a recession.
UBS economists also expect the economy to develop only modestly. Specifically, (adjusted) GDP growth of 1.4 percent is forecast for 2025, and only 0.9 percent for 2026.
