Manufacturing pay settlements have fallen very sharply to a new low with more than three-quarters of manufacturing companies now freezing pay, according to the latest figures from EEF, the manufacturers’ organisation.
In the three months to the end of July last year, the average settlement level was 3.2 per cent, illustrating the extent to which companies have had to respond to the severe economic conditions.
EEF’s pay data for the three months to the end of August shows that the average level of pay settlements has fallen very sharply to 0.3 per cent, down from the revised figure of 0.8 per cent for the previous three months to the end of July.
This is the lowest level of pay settlements reported by manufacturers since EEF’s survey began in 1987.
In the same period, the number of manufacturers reporting that they had frozen pay rose to just over three-quarters of all reported settlements, the highest figure reported since EEF’s survey began. However, the number of manufacturers reporting that they had deferred their pay settlement fell slightly to just over 13 per cent in this period.
Commenting on these latest figures, David Yeandle, EEF head of Employment Policy, said: ‘This sharp fall in manufacturing pay settlements is mainly due to the exceptionally high proportion of companies that are now freezing pay. Given the tough economic conditions, there are no signs that this pattern of very low average pay settlements and significant numbers of manufacturers freezing pay will change in the near future.’