According to the results of the Fast and Exceptional Enterprise Survey (IREE) - May 2022 Edition, 82% of firms intend to increase wages this year and in close to 40% the increases will be higher than in 2021. The results point to an average nominal growth of wages per employee of around 5% in 2022 for the responding firms (4% in the previous year). 

In the group of firms with expectations of wage changes in 2022 higher than those observed in the previous year, 35% anticipate increases in employment in the current year, compared to a percentage of 19% in the other firms. In the first group, firms also mention more frequently the increase in the minimum wage - which stood at 6% this year - and the need to retain workers as factors of upward pressure on wages. The latter factor likely reflects the shortage of skilled workers in the labour market. The inflation rate and the need to attract new workers are also reasons mentioned, particularly by firms where wages are expected to accelerate. Notwithstanding the wage increase forecasted for 2022, entrepreneurs also highlight factors that contribute to mitigate this evolution, such as the increase in production costs and greater economic uncertainty.

For more details see box "Outlook for prices and wages in 2022 – an analysis based on the Fast and Exceptional Enterprise Survey results", of the June 2022 Economic Bulletin and the information note of the IREE results - May 2022 Edition.

Prepared by Ana Sequeira and Cristina Manteu. The analyses, opinions and findings expressed above represent the views of the author and not necessarily those of Banco de Portugal or the Eurosystem.

If you want to receive an e-mail whenever a new “Economics in a picture” is published send your request to info@bportugal.pt.