Swiss firms plan modest wage rises of 1% for 2027

Swiss employers expect average wage increases of 1% in 2027, a slight reduction from the 1.1% planned for this year. The estimate comes from the UBS Wage Survey, published on Tuesday, November 3, and based on responses from just under 400 Swiss companies.

UBS forecasts inflation of 0.8% next year. If wages rise as companies currently plan, that would leave employees with a 0.2% real wage gain. The bank says that would sit below the long-term average and below the 0.4% increase in purchasing power expected for 2026.

The survey captures a restrained pay outlook even as business confidence improves across all sectors. For employees, the headline increase is only part of the picture: the expected rise in prices would absorb most of it, leaving a modest gain after inflation. Companies’ plans remain forecasts, but the figures set out the current direction of pay expectations for the year ahead.

Energy, water and waste management companies plan the largest increases, at 1.5%. That is half a percentage point above the overall average and leads the sector rankings in the UBS survey.

Chemicals and pharmaceuticals firms, along with the metals industry, expect wage rises of 1.2%. Most sectors are planning an increase of 1%. The lower end of the range is in retail, at 0.8%, and watches and jewellery, at 0.7%.

The spread shows that the national average masks different plans by industry. Energy supply and environmental services sit at the top, while retail and the watch and jewellery sector are below the average. The figures are planned increases, rather than a record of pay already awarded. Across the sectors surveyed, however, the broad pattern remains modest: most employers expect increases clustered around 1%, with only a few planning more than that.

Improving business confidence has yet to translate into stronger hiring expectations. UBS reports that confidence has risen across all sectors, particularly in industry, but the labour-market outlook remains subdued.

Most surveyed companies expect Switzerland’s unemployment rate to remain unchanged. They also anticipate that their own staff numbers will stagnate. The combination of cautious staffing and low inflation expectations is shaping the modest wage plans for 2027, UBS economist Meret Mügeli said.

“Low inflation expectations and companies’ continued cautious approach to staffing suggest subdued wage growth,” Mügeli said. She added that the economic recovery is filtering through to the labour market and wages only slowly. That assessment links the survey’s two main signals: firms report improved confidence, yet their employment plans remain restrained and their average pay increase is set to edge down from this year’s level.

UBS expects the Swiss economy to grow by 1.5% in 2027, after adjusting for sporting events. Its wage survey suggests that any recovery will take time to show up in pay and employment plans, with companies forecasting a small real wage gain and largely flat staffing.

The bank also expects the Swiss National Bank to raise its key interest rate to 0.25% in March and 0.5% in June. Those are UBS forecasts for next year, alongside its inflation projection of 0.8%. Together, the figures frame the economic outlook facing Swiss employers as they set pay plans: measured growth, low expected inflation and a labour market that firms expect to remain subdued.

For employees, the survey’s central estimate is a 0.2% increase in purchasing power in 2027, below the 0.4% expected for 2026. The planned wage rises vary by sector, but most firms surveyed are clustering around a 1% increase.