The latest data from the Sigmanomics database shows Ireland’s Average Weekly Earnings (AWE) YoY growth at 4.90% for November 2025. This figure is a slight deceleration from the 5.30% recorded in August and below the 5.10% market estimate. Over the past two years, wage growth has fluctuated between a low of 2.10% in March 2024 and a high of 5.60% in early 2025, reflecting shifting labor market dynamics and inflationary pressures.

Drivers this month

• Moderate wage growth in services and manufacturing sectors.
• Slower growth in construction wages compared to previous quarters.
• Inflation easing contributed to reduced wage pressure.

Policy pulse

The 4.90% wage growth remains above the Central Bank of Ireland’s inflation target range of 2%, suggesting persistent labor cost pressures. However, the downward trend from 5.60% earlier this year may support a pause or slower pace in interest rate hikes.

Market lens

Immediate reaction: EUR/GBP slipped 0.15% within the first hour post-release, reflecting market caution on wage-driven inflation risks. Short-term government bond yields edged down by 3 basis points, signaling modest relief in inflation expectations.

Average Weekly Earnings growth is a critical indicator of labor market health and inflationary trends. Ireland’s 4.90% YoY increase in November 2025 compares to a 12-month average of approximately 4.90%, indicating a stabilization after volatile swings earlier in the year.

Comparative context

• November 2025: 4.90% YoY growth
• August 2025: 5.30% YoY growth
• March 2024: 2.10% YoY growth (lowest recent point)
• Peak in February 2025: 5.60% YoY growth

Monetary policy & financial conditions

The Central Bank of Ireland and ECB have maintained a cautious tightening bias amid elevated wage growth. The recent moderation in earnings growth may reduce pressure for aggressive rate hikes. Financial conditions remain moderately tight, with credit spreads stable and the Irish government bond yield curve flattening.

Fiscal policy & government budget

Fiscal discipline remains a priority as Ireland balances wage growth with budgetary constraints. The government’s recent budget maintained a neutral stance, focusing on targeted social spending without broad wage subsidies, which may temper wage inflation further.

Sectoral breakdowns reveal that wage growth in services and manufacturing remains steady at around 5%, while construction wages have slowed to 3.80%, down from 5.10% six months ago. This divergence highlights sector-specific labor market adjustments amid changing demand and supply conditions.

Market lens

Immediate reaction: EUR/USD declined 0.20% post-release, reflecting concerns about slower wage growth dampening inflation but also signaling uncertainty about future ECB moves. Irish 2-year bond yields fell 4 basis points, indicating a modest easing of inflation risk premiums.

Looking ahead, wage growth in Ireland is expected to moderate further but remain above 3.50% through mid-2026. This outlook balances ongoing labor market tightness with easing inflation and fiscal prudence.

Bullish scenario (20% probability)

• Wage growth stabilizes around 5%, supporting consumer spending and economic growth.
• Monetary policy remains accommodative, boosting investment and employment.
• External shocks are minimal, and geopolitical risks subside.

Base scenario (60% probability)

• Wage growth slows gradually to 3.50-4.50%, easing inflation pressures.
• ECB maintains cautious rate hikes, balancing growth and inflation risks.
• Fiscal policy remains neutral, with targeted support to vulnerable sectors.

Bearish scenario (20% probability)

• Wage growth falls below 3%, signaling weakening labor market.
• Geopolitical tensions or external shocks disrupt trade and investment.
• Monetary tightening accelerates, risking recessionary pressures.

In summary, Ireland’s Average Weekly Earnings YoY growth at 4.90% reflects a labor market that remains tight but is showing signs of easing wage inflation. This moderation aligns with broader macroeconomic trends, including cautious monetary policy and stable fiscal management. External risks and geopolitical uncertainties remain key variables to monitor. Financial markets have responded with mild volatility, signaling a wait-and-see approach ahead of upcoming ECB decisions.

Continued monitoring of wage trends alongside inflation, employment, and external conditions will be critical for policymakers and investors navigating Ireland’s economic landscape in 2026.

Key Markets Likely to React to Average Weekly Earnings YoY

The Average Weekly Earnings YoY figure is a key driver of inflation expectations and monetary policy outlook in Ireland and the Eurozone. Markets sensitive to labor cost trends and inflation will react notably to this data.

• IE00B4BNMY34 – Irish equity ETF, sensitive to domestic wage-driven consumption trends.
• EURUSD – Euro to US Dollar currency pair, reacts to ECB policy shifts influenced by wage inflation.
• EURGBP – Euro to British Pound pair, sensitive to relative economic strength and wage growth.
• BTCUSD – Bitcoin, often reacts to macroeconomic uncertainty and inflation trends.
• CRH – Major Irish construction firm, impacted by wage costs and sectoral wage trends.

Insight: Average Weekly Earnings YoY vs. EURUSD Since 2020

Since 2020, Ireland’s Average Weekly Earnings YoY growth has shown a positive correlation with EURUSD movements. Periods of accelerating wage growth (e.g., early 2025) coincided with EURUSD strengthening, reflecting expectations of tighter ECB policy. Conversely, wage growth slowdowns have aligned with EURUSD dips, as seen in late 2025. This relationship underscores the importance of wage data as a barometer for currency markets and monetary policy expectations.

FAQs

What is the significance of Ireland’s Average Weekly Earnings YoY data?

This indicator measures wage growth, signaling labor market health and inflation pressures, influencing monetary policy and economic forecasts.

How does the latest 4.90% wage growth compare historically?

The 4.90% figure is below the recent peak of 5.60% in early 2025 but above the 2.10% low in March 2024, indicating a stabilizing trend.

What are the main risks affecting future wage growth in Ireland?

Risks include geopolitical tensions, external shocks to trade, monetary tightening, and sector-specific labor market shifts.

Takeaway: Ireland’s wage growth is moderating but remains elevated, balancing inflation risks and supporting cautious monetary policy in a complex global environment.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.