Eurozone Wage Growth Slows, ECB Reports

Eurozone negotiated wage growth is losing momentum, according to new data from the European Central Bank. Lower values in 2025 reflect a strong base year in 2024, while active agreements covering periods through the third quarter of 2026 also point to moderate dynamics.

The updated indicator shows negotiated wages rising 4.7% in 2024 including one-off payments. In 2025, growth slowed to 3.2%. Excluding large one-off components, the trend appears more stable at 4.2% and 3.9% respectively. Preliminary figures for 2026, based on existing collective agreements, indicate significantly weaker wage momentum than in previous years. By Q3 2026, the headline indicator stands at 2.2%, the same level recorded when including one-off payments. Without them, the value reaches 2.4%.

Coverage of employees within the dataset is also shrinking — from 47.2% at the end of 2025 to just 19.4% by the third quarter of 2026 — reducing the robustness of the signal.

How structure and timing distort wage trajectories

The ECB explains that the indicator is influenced not only by one-off payments but also by the structure of the wage agreements themselves. In several sectors, a significant share of increases was front-loaded into early 2024, creating sharper contrasts between periods. The update incorporates revised data from Belgium and Austria, where one-off payments are now fully accounted for. It also extends the observation period of active agreements through the end of September 2026.

The negotiated wage indicator does not match the official wage measure published in standard statistics. It is based solely on collective agreements and uses a separate aggregation methodology, meaning the two series may diverge. This is evident when compared with ECB macroeconomic projections, which estimate compensation per employee rising 3.4% in 2025 and 2.7% in 2026. The difference reflects data composition and coverage, not contradictions in the underlying labour trends.

A unified dataset across eight eurozone labour markets

The indicator draws on a shared database of collective agreements maintained by the central banks of eight eurozone countries: Belgium, Germany, Greece, Spain, France, Italy, the Netherlands and Austria. Values are weighted by each country’s total employee compensation, ensuring comparability across labour markets of different sizes.

Changing cost structures for European employers

Alongside moderating wage growth, the cost of maintaining workplaces in Europe is also shifting. According to Colliers, total workplace costs per employee reached €9,809 in 2024 — a formal decrease of 1%. However, this figure assumes full office occupancy. Actual occupancy remains at 30–40%, meaning real cost per used workplace would be substantially higher, between €25,000 and €33,000 per year.

Cost structures are moving toward higher-value categories. Spending on office infrastructure and services fell by 9% and 4% respectively, while costs related to operational support and IT rose. In 2024, service-related spending increased to €1,040, and digital infrastructure costs grew to €2,052. The rising price of technology and software is becoming one of the main drivers of workplace cost formation, even with stable total spending.

Differences across Europe remain substantial. The lowest workplace costs — between €3,514 and €5,400 — were recorded in Bulgaria, Romania, Hungary, Croatia, Latvia, Slovakia and Lithuania. Mid-range values — €6,002 to €6,959 — were found in Czechia, Estonia, Portugal and Greece. Southern Europe showed higher levels, such as Spain at around €8,100.

Costs were highest in Denmark, Germany, Luxembourg, France, Sweden, the UK, Norway and Switzerland, ranging from €13,112 to over €20,553.

Dynamics also vary. Italy and Norway recorded declines of 9% and 8%, as did several Central European markets, while Germany, Spain, Austria and Switzerland saw increases of up to 3%, reflecting rising service and infrastructure prices. Currency fluctuations add to the divergence, with the Polish złoty, British pound and Swiss franc strengthening, and Central and Eastern European currencies weakening.

A labour market entering a phase of moderated cost growth

ECB and Colliers data suggest the European labour market is entering a period of more measured cost expansion. Negotiated wages are slowing as one-off payments fade, while employers’ cost structures shift toward services and digital infrastructure. In this environment, companies' ability to adapt workplace management models — particularly in line with actual office usage — will be critical for sustaining cost stability in the coming years.