European Central Bank Wage Tracker Indicates Easing Wage Pressures
New data suggests negotiated wage growth is projected to slow in 2025 as contractual agreements evolve.
The European Central Bank (ECB) has published the latest update on its wage tracker, reflecting collective bargaining agreements signed up to February 19, 2025. The findings indicate that the overall negotiated wage growth is expected to decelerate in 2025, continuing a trend observed in the previous year.
The ECB wage tracker, which covers ongoing collective bargaining agreements, reports an average negotiated wage growth of 4.7% for 2024 when accounting for smoothed one-off payments, and a projected 3.3% for 2025. This data is based on an average coverage of 48.2% of employees in participating countries for 2024, decreasing to 40.5% for 2025. Additionally, when examining unsmoothed one-off payments, the tracker indicates a wage growth of 4.8% in 2024 and a projected decline to 2.8% in 2025.
The downward shift in the forward-looking wage tracker for 2025 partly reflects the impact of large one-off payments made in 2024 that will not recur, alongside a trend of substantial wage increases negotiated in certain sectors during 2024. When excluding one-off payments, the tracker shows a negotiated wage growth of 4.1% in 2024 and a slightly reduced forecast of 3.9% for 2025.
The data from the ECB's wage tracker may be revised as new agreements are reached throughout the year.
It is important to note that the forward-looking aspect does not serve as a definitive forecast but rather as an indication of current trends in negotiated wages, which can vary based on the limited data set of active agreements available.
In relation to broader wage trends, the ECB's March 2025 macroeconomic projection anticipates average yearly growth of compensation per employee in the euro area to be 4.6% for 2024 and 3.4% for 2025, with quarterly growth rates projected to decline progressively throughout the year.
The ECB provides four identifiable wage tracker indicators specifically for seven countries participating in the euro area.
These indicators are designed to reflect varying aspects of negotiated wage agreements:
- The headline indicator incorporates collectively agreed one-off payments, smoothed over a 12-month period.
- The tracker excluding one-off payments highlights more permanent negotiated increases.
- The unsmoothed version incorporates one-off payments without smoothing to capture immediate wage growth effects.
- The share of employees covered denotes the percentage of the workforce in participating countries contributed to the analysis, varying by country over time.
The aggregate wage growth figures presented in the ECB data reflect comprehensive calculations based on direct contributions from national banking institutions and statistical agencies of the euro area.
The indicators aim to provide visibility into the dynamics of wage negotiations across Europe, highlighting shifts in labor compensation amidst evolving economic conditions.
The ECB wage tracker, which covers ongoing collective bargaining agreements, reports an average negotiated wage growth of 4.7% for 2024 when accounting for smoothed one-off payments, and a projected 3.3% for 2025. This data is based on an average coverage of 48.2% of employees in participating countries for 2024, decreasing to 40.5% for 2025. Additionally, when examining unsmoothed one-off payments, the tracker indicates a wage growth of 4.8% in 2024 and a projected decline to 2.8% in 2025.
The downward shift in the forward-looking wage tracker for 2025 partly reflects the impact of large one-off payments made in 2024 that will not recur, alongside a trend of substantial wage increases negotiated in certain sectors during 2024. When excluding one-off payments, the tracker shows a negotiated wage growth of 4.1% in 2024 and a slightly reduced forecast of 3.9% for 2025.
The data from the ECB's wage tracker may be revised as new agreements are reached throughout the year.
It is important to note that the forward-looking aspect does not serve as a definitive forecast but rather as an indication of current trends in negotiated wages, which can vary based on the limited data set of active agreements available.
In relation to broader wage trends, the ECB's March 2025 macroeconomic projection anticipates average yearly growth of compensation per employee in the euro area to be 4.6% for 2024 and 3.4% for 2025, with quarterly growth rates projected to decline progressively throughout the year.
The ECB provides four identifiable wage tracker indicators specifically for seven countries participating in the euro area.
These indicators are designed to reflect varying aspects of negotiated wage agreements:
- The headline indicator incorporates collectively agreed one-off payments, smoothed over a 12-month period.
- The tracker excluding one-off payments highlights more permanent negotiated increases.
- The unsmoothed version incorporates one-off payments without smoothing to capture immediate wage growth effects.
- The share of employees covered denotes the percentage of the workforce in participating countries contributed to the analysis, varying by country over time.
The aggregate wage growth figures presented in the ECB data reflect comprehensive calculations based on direct contributions from national banking institutions and statistical agencies of the euro area.
The indicators aim to provide visibility into the dynamics of wage negotiations across Europe, highlighting shifts in labor compensation amidst evolving economic conditions.
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