Pay levels ease in manufacturing

MANUFACTURING pay settlements appear to have levelled out below pre-recession levels, according to new research.

The survey from the manufacturers’ association, EEF, and JAM Recruitment, should ease fears that higher inflation would translate into substantial upward pressure on pay.

Its pay data for the 3 months to the end of June (including data for April, the second busiest month for pay negotiations) shows that the average pay settlement for the period was 2.5%, the same as the revised figure for the three months to the end of May.

Moreover, whilst the proportion of settlements agreed at more than 3% continued to drift upwards to almost 1 in 5 settlements, at the other end of the spectrum, almost a quarter of settlements are below 2%, with pay freezes still being agreed in 12% of settlements.   

Commenting on the latest figures, David Ost, EEF North West region director, said: “After a period of gradual increases, settlements appear to have levelled out below the long term normal range.

“Whilst there is undoubted pressure to give higher settlements, there is an equal dose of realism amongst companies and their employees in response to economic uncertainty and competitive pressures.

“As far as manufacturing is concerned at least, the Bank of England has little to fear from wage inflationary pressures.”