(Bloomberg) -- Euro-zone companies see a more moderate increase in workers’ pay over the next 12 months, according to a European Central Bank survey.
Salaries are expected to rise by 3.3% — down from 3.8% in the previous round three months ago, the ECB said Monday in its Survey on the Access to Finance of Enterprises. Firms also lowered their selling-price expectations — to 3% from 3.3%.
ECB officials are focused on such measures to determine how quickly inflation will ease toward their 2% goal. The expected decrease in wage growth will be taken as a positive sign, as 3% is a level that’s generally deemed in line with the target for consumer-price gains.
While inflation has slowed to 2.5%, it’s stuck at a more elevated level in the services sector, where salaries play a comparatively more important role. In the survey, the ECB cautioned that companies in that part of the economy “expect a larger increase in selling prices, wage costs, non-labor input costs and employment over the next 12 months compared with other sectors.”
The ECB also said:
- Firms signaled more positive developments as regards the supply of bank loans
- Fewer firms recorded a moderate tightening of financing conditions in the second quarter
- Companies reported a slight reduction in the need for bank loans and improvements in the availability of bank loans
- Firms’ inflation expectations declined, with their median expectations for annual inflation in one, three and five years all standing at 3%
- 50% of them considered that risks to the inflation outlook in five years were tilted to the upside
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