ECB Wage Tracker Indicates Decline in Negotiated Wage Growth for 2025
New data reveals a trend of easing negotiated wage growth across euro area countries, with projections showing significant changes for the remainder of 2025.
The European Central Bank (ECB) has released an updated wage tracker, revealing that negotiated wage growth is expected to decline over the course of 2025. This tracker is based on collective bargaining agreements signed up to mid-May 2025 and indicates a smoothed negotiated wage growth of 4.7% in 2024, with a decrease to 3.1% anticipated for 2025. These statistics reflect an average coverage of 48.8% of employees in participating countries for 2024 and an average of 47.4% for 2025.
Analyzing the wage tracker further, the data shows an average negotiated wage growth level of 4.9% for 2024 and 2.9% for 2025 when considering unsmoothed one-off payments.
The decline for the remainder of 2025 is attributed to the one-off payments made in 2024 that are dropping out of the calculations, alongside the front-loaded nature of wage increases seen in some sectors last year.
Excluding these one-off payments, the growth rate is reported at 4.2% for 2024 and is forecasted to be 3.8% for 2025.
The ECB wage tracker is subject to revisions, and the forward-looking aspects should not be taken as definitive forecasts, as they are based only on existing information available from collective bargaining agreements.
Furthermore, it is important to note that the tracker does not precisely track negotiated wage growth, leading to potential deviations over time.
For a broader context regarding wage developments in the euro area, the ECB has also published the Eurosystem staff macroeconomic projections for June 2025, indicating an expected yearly growth rate of compensation per employee in the euro area of 3.2% for 2025. This consists of 3.5% in the first quarter, followed by 3.4%, 3.1%, and 2.8% in the subsequent quarters.
The ECB provides four key wage tracker indicators for the aggregate of seven participating euro area countries, including Germany, France, Spain, Italy, Greece, Austria, and the Netherlands.
These indicators serve different purposes: the headline ECB wage tracker accounts for negotiated wage growth including one-off payments, while the tracker excluding these payments focuses on structural, permanent negotiated wage increases.
Moreover, there is an aggregated figure considering unsmoothed one-off payments.
With substantial variations across the seven participating countries, the share of employees covered by the ECB wage tracker fluctuates over time, reflecting the data's representativeness.
Tables summarizing the wage trend indicators and coverage by country detail the nuances of negotiated wage growth, and underscore the importance of monitoring these trends for economic assessments across the euro area.
Analyzing the wage tracker further, the data shows an average negotiated wage growth level of 4.9% for 2024 and 2.9% for 2025 when considering unsmoothed one-off payments.
The decline for the remainder of 2025 is attributed to the one-off payments made in 2024 that are dropping out of the calculations, alongside the front-loaded nature of wage increases seen in some sectors last year.
Excluding these one-off payments, the growth rate is reported at 4.2% for 2024 and is forecasted to be 3.8% for 2025.
The ECB wage tracker is subject to revisions, and the forward-looking aspects should not be taken as definitive forecasts, as they are based only on existing information available from collective bargaining agreements.
Furthermore, it is important to note that the tracker does not precisely track negotiated wage growth, leading to potential deviations over time.
For a broader context regarding wage developments in the euro area, the ECB has also published the Eurosystem staff macroeconomic projections for June 2025, indicating an expected yearly growth rate of compensation per employee in the euro area of 3.2% for 2025. This consists of 3.5% in the first quarter, followed by 3.4%, 3.1%, and 2.8% in the subsequent quarters.
The ECB provides four key wage tracker indicators for the aggregate of seven participating euro area countries, including Germany, France, Spain, Italy, Greece, Austria, and the Netherlands.
These indicators serve different purposes: the headline ECB wage tracker accounts for negotiated wage growth including one-off payments, while the tracker excluding these payments focuses on structural, permanent negotiated wage increases.
Moreover, there is an aggregated figure considering unsmoothed one-off payments.
With substantial variations across the seven participating countries, the share of employees covered by the ECB wage tracker fluctuates over time, reflecting the data's representativeness.
Tables summarizing the wage trend indicators and coverage by country detail the nuances of negotiated wage growth, and underscore the importance of monitoring these trends for economic assessments across the euro area.
