Manufacturing pay deals on the rise

MANUFACTURING pay settlements have risen to their highest level in nearly a year.

Pay deals are now running at 1%, says EEF, the manufacturers’ organisation, but is  a very slight rise on the previous average as fewer employers are implementing pay freezes.

But settlements remain at historically low levels, warns the EEF, and the economic outlook remains very fragile for manufacturers.

EEF’s pay data for the 3 months to the end of March 2010 shows that the average pay settlement has risen very slightly to 1% from the figure of 0.9% for the previous three-month period to the end of February. Whilst this is now the highest level since April 2009, it remains at a relatively low level by historical standards.

The number of manufacturers freezing pay fell very slightly to just under a half of all reported settlements during the same period, whilst those deferring their pay settlement also fell very slightly to just under 20% of all reported settlements.

David Yeandle, EEF Head of Employment Policy, said: “This fall in the number of companies freezing or deferring their pay settlement has contributed to the very slight increase in the average level of pay settlements in manufacturing. However, it still remains at an historically low level demonstrating that conditions remain tight for many companies and the fragile nature of the economic recovery.”

The EEF survey covered 375 settlements involving 67,232 employees. The average settlement was 0.9% in January 2010, 0.6% in February 2010 and 1.5% in March 2010 although the figures for both February and March 2010 are based on very small samples.