Average pay rise in manufacturing reaches 0.5%

THE AVERAGE level of pay settlements in manufacturing has risen very slightly to 0.5% but still remains at an historically low level according to the latest figures from EEF, the manufacturers’ organisation.

The median figure for the rest of the UK in 2010 is expected to be 2%.

But the figure is based on a relatively small sample, says the organisation, with next month’s figure, covering the key settlement month for manufacturers of January, giving a clearer indication of future pay trends in the sector.

EEF’s pay data for the three months to the end of December 2009 shows the average pay settlement rose very slightly to 0.5% from the revised figure of 0.4% for the previous three month period. Of the 78 companies surveyed, 53 had implemented a pay freeze.Only one had agreed a pay deal above 3%.

The number of manufacturers freezing pay fell slightly to just over two out of three reported settlements during the three month period. In contrast, the number of companies deferring their pay settlement rose slightly to just over 30% of all reported settlements.

Last week, Hay Group, the management consultancy, forecast a 2% median pay increase across the UK private sector this year – a marked improvement on predictions of just 1% in March 2009.

The same study reported that 79% of organisations intended to increase salaries in 2010 – compared to 57% that actually did in 2009.