Despite higher salaries, the Swiss have less money in their pockets. New figures released by the Federal Office for Statistics show that while wages increased by a nominal 1.3 per cent last year, in real terms they fell by 0.3 per cent.

The salary increase was more than offset by inflation of 1.6 per cent.

It was the second consecutive drop in real wages. In 1999 buying power fell by 0.5 per cent.

The figures show that wage earners have been slow to benefit from the economic upswing, which began in 1997. But economists are predicting a change in the current year.

"The upturn has until now passed the labour market by," said Serge Gaillard, an economist with the trade union federation. "Only by taking a strong line at the end of 2000 were the unions able to break this pattern."

Gaillard says salaries are set to rise by a nominal 2.6 per cent this year, or 1.1 per cent in real terms.

The Statistics Office said it also expected real wages to increase in 2000. It said the level of salaries for last year was set towards the end of 1999, when companies were still reacting cautiously to the stronger economy.

According to the new figures, salaries grew most last year in agriculture, industry and commerce, with the smallest increases in the services industry.

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