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Latest News - April 2012

April 23, 2012
Manufacturers show ‘realism’ with small pay rises
Source: People Management

Little pay bargaining in evidence as average hovers at 2.6 per cent

Pay rises in the UK manufacturing sector have been a “below-average” 2.6 per cent in the first three months of this year, according to new data released today.

The industry’s main pay bargaining round had passed “with economic realism prevailing”, said manufacturers’ association the EEF, which compiled the figures together with JAM recruitment.

The 2.6 per cent figure represented a small increase on the previous quarter’s average pay rise of 2.5 per cent, but was still below the sector’s long-term settlement average of 2.7 per cent, said the EEF.

The latest data showed that pay freezes had fallen to just under 1 in 10 settlements, whilst deferred deals were hovering around 5 per of the total.

Three-quarters of awards were at or below 3 per cent, while 44 of the 305 manufacturing companies surveyed offered pay rises of 4 per cent or more to staff at the beginning of 2012.

“The main pay bargaining round for manufacturing has passed with little or no pay pressures evident,” said Lee Hopley, EEF’s Chief Economist. “It is clear that the cocktail of competitive pressures and continued economic uncertainty is leading to a sense of realism on both sides of the negotiating table.”

John Morris, chief executive of JAM Recruitment, added: “The fact that pay increases seem to have settled slightly below the historical average is good news for manufacturing businesses, which are not seeing margins depleted by excessive upwards pressure on wages.”

But Morris warned that the disparity between the salaries that organisations were prepared to offer, and what employees were demanding, could “nudge pay settlements back up to average levels and beyond in the near future.”

The settlement figures published today covered nearly 52,000 employees in the manufacturing sector.




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