Optimism for economic recovery in the UK is growing according to the latest survey on pay settlements conducted by manufacturing industry organisation EEF, which works to help industry flourish and meet worldwide demand for innovative and responsibly-produced manufactured goods.
Announcing the results of its survey on Thursday, EEF said the data showed that the three-month average pay settlement by manufacturers has stayed at 2.6%, after reaching that level in January this year. One of the major pay rounds for the year is included in the figures, which EEF stated could be mean that this could be seen ‘setting the scene’ for pay deals in 2014.
Last year, pay settlements averaged out at 2.4% and during the summer months of 2013 pay settlements averaged just 2.2%. Concerns about wage inflation are said to have been allayed, as the EEF figures suggest that manufacturers have reached affordable agreements with employees.
EEF also said that the proportion of pay freezes is stable at 5%, which is the lowest level since August 2008. There were fewer smaller settlements, with just over a quarter coming in at less than 2%, while pay deferrals were also stable at 4%.
Chief Economist at EEF, Ms Lee Hopley, commented: “We’re by no means out of the woods yet, but there’s plenty to suggest that we’re on the right path. Pay settlements seem to be stabilising at a level that is both affordable and higher than last year. This is another good indication that the green shoots of recovery are firmly taking root and the pressure on household budgets, at least for manufacturing employees, is starting to unwind.
“Manufacturing continues to be a driving force and this also reflects in the growth of pay where the sector is outpacing the rest of the economy. Put simply, workers in the sector are reaping the rewards of recovery earlier than others. Hopefully this level of confidence will continue as manufacturers carry on picking up pace.”