Growth in posted wages across Europe accelerated sharply this year to reach 5.2% in October, but still lag behind the eurozone inflation rate of over 10%, a report by the Central Bank and Indeed showed.
New indicators suggested wage growth in job postings has now plateaued at these historically high levels, as the report found many employers across the continent are starting to rethink their demand for staff as they balance the currently tight labour market against an increasingly uncertain and deteriorating economic outlook.
“While wage growth accelerated earlier this year, and employees dealing with a higher cost of living benefited from higher pay, our latest data shows signs that wage growth may be plateauing in Ireland and several other countries in Europe,” said Pawel Adrjan, economist at global job site Indeed and co-author of the report.
Wage growth in Ireland reached 4.7% by October, which is still behind the country’s inflation rate of almost 10%.
The pandemic shifted the landscape in terms of what jobs experienced the biggest pay increases.
Occupations seeing the fastest wage growth across all countries featured in the report were community and social services, cleaning and sanitation, food preparation and services, driving, customer service, loading and stocking, retail, childcare, sales, as well as installation and maintenance.
The largest year-on-year increase in posted wages in Ireland by October was recorded in customer service followed by sales. These categories were further down the list in other countries.
Germany leads the rankings in wage growth at 7.1%, followed by France at 5%, Ireland at 4.7%, Italy at 4.2%, the Netherlands at 4% and Spain at 3.5%.
The report contains data collected from 24m job postings available on Indeed between January 2018 and October 2022 across these five European countries plus the UK.
Germany is the one country in the report where year-on-year wage growth has not yet decelerated. Instead, it continued to increase during Q3.
In the UK, wage growth has generally been higher than in the euro area due to both higher inflation and a decline in labour supply.
Posted wage growth in the UK peaked at 6.4% in June before falling back gradually to 6.2% by the end of Q3.