The latest pay rises in the UK manufacturing sector reflect economic realism, according to a report released today by manufacturers’ organisation EEF and JAM Recruitment.
In the first three months of the year the average pay settlement amounted to 2.6%, a small increase compared with the previous three-month figure of 2.5% but below the long-term settlement average, the two organisations said. Three quarters of pay settlements are at or below 3%, while the current rate of inflation in the UK is 3.5%. Pay freezes have fallen to just under one in ten settlements and deferred settlements have remained at around 5% of the total.
Figures for the April 2012 Pay Bulletin are taken from a survey of more than 300 companies and include pay settlements for 51,805 employees.
EEF chief economist Lee Hopley said the report shows that the main pay bargaining round for manufacturing has passed with little or no pay pressure and a sense of realism on both sides, resulting from the combination of competitive pressures and continued economic uncertainty.
John Morris, chief executive of JAM Recruitment, added that the relatively low pay increases represent good news for manufacturing businesses because there is reduced pressure to raise wages. Nevertheless, the gap between the salaries on offer from manufacturing firms and how much candidates think they are worth could cause pay settlements to return to average levels or above in the near future, he claimed.