Negotiated wage growth to stabilize at 2.6 percent in 2026
The European Central Bank's updated wage tracker indicates that negotiated wage growth is expected to stabilize at around 2.6 percent by the end of 2026. This forward-looking information covers agreements signed up to end-February 2026.
Wage growth moderates across measures
The ECB's updated wage tracker, covering active collective bargaining agreements, indicates negotiated wage growth with smoothed one-off payments at 3.2 percent in 2025, easing to 2.3 percent in 2026.
This 2026 projection is a 0.1 percentage point downward revision from the February data.
The tracker with unsmoothed one-off payments shows growth at 3.0 percent for 2025 and 2.6 percent for 2026, also revised down by 0.1 percentage points for 2026.
Excluding one-off payments, growth moderates from 3.9 percent in 2025 to 2.6 percent in 2026, again a 0.1 percentage point reduction for 2026.
The headline tracker, smoothing one-off payments, is better for quarterly dynamics, while the unsmoothed version suits yearly trends.
Employee coverage for 2025 was 50.7 percent, declining to 39.7 percent for 2026 as agreements are finalized.
Statistical effects shape 2026 outlook
The headline ECB wage tracker for 2026 shows quarterly averages rising from 1.9 percent in Q1 to 2.6 percent in Q4. This increase is largely due to statistical effects from earlier one-off payments, expected to diminish over the year, rather than new wage pressures.
The unsmoothed tracker and the tracker excluding one-off payments both suggest a more stable and moderate outlook for negotiated wage growth in 2026, averaging around 2.6 percent.
Employee coverage for 2026 starts at 44.1 percent in Q1, declining to 36.3 percent by Q4. The wage tracker's forward-looking horizon extends to December 2026, with an expansion to Q1 2027 planned for the July 2026 data release.
A partial view on labor costs
The ECB wage tracker provides a valuable, though limited, forward-looking signal for negotiated wages.
It explicitly cautions against interpreting its component as a definitive forecast, as it only reflects currently available collective bargaining agreements and is subject to revision.
Therefore, for a comprehensive assessment of broader labor cost developments, other indicators remain crucial.