Negotiated wage growth to reach 2.7 percent in early 2027
The European Central Bank's updated wage tracker indicates negotiated wage growth of 2.7 percent in the first quarter and 2.8 percent in the second quarter of 2027. The indicator projects an increase from the 2.2 percent average recorded for 2026.
One-off distortions fade away
The European Central Bank updated its wage tracker with collective bargaining agreements signed through August 2026, extending the horizon to June 2027.
For 2026, the headline indicator with smoothed one-off payments stands at 2.2 percent across 46.9 percent of employees in nine euro area countries.
In 2027, the measure reaches 2.7 percent in the first quarter and 2.8 percent in the second quarter.
The lower rates in early 2026 reflected base effects from non-recurring one-off payments in late 2024, which dissipate entirely in late 2026.
Excluding one-off payments, wage growth averages 2.6 percent in 2026, pointing to a modest role for special bonuses in recent agreements.
Thinning coverage into 2027
Employee coverage drops from 46.9 percent in 2026 to 32.5 percent in the first quarter of 2027 and 25.1 percent in the second quarter.
Coverage varies widely across member states, standing at 44.3 percent in Belgium and 59.4 percent in Finland for mid-2027, but falling to 8.7 percent in Spain and 10.3 percent in France.
The ECB cautions that forward-looking figures reflect only active contracts, while staff macroeconomic projections place broader compensation growth higher at 3.3 percent.
A useful signal with glaring blind spots
Contract tracking offers visibility, but low coverage makes the 2027 numbers premature for policy conclusions.
With only a quarter of workers covered by mid-2027, upcoming bargaining rounds will easily alter the path.
Policymakers should treat this initial signal as an incomplete sketch rather than a reliable trend.