Manufacturing pay remains stable through main bargaining round

Pay settlements in the sector remain at normal levels through what is regarded as the key bargaining period, said EEF which conducts a monthly survey on the subject in association with Jam Recruitment. According to a survey for the three months to the end of February, the average pay settlement for the period was 2.5%, a figure below the long-term settlement average. The data also shows that pay freezes have fallen to around one in ten settlements while the vast majority of settlements continue to be below 3%. The figures from the current negotiating round back an EEF survey at the start of the year which showed that while 30% regarded significant upward pressure on pay as a risk to growth, only 5% of companies regarded it as their most significant risk. The issue ranked fourth behind shortage of raw materials, the financial crisis and access to external finance. Commenting on the latest figures, EEF chief economist Lee Hopley said: "Pay settlements have remained below long run average levels with a sense of economic realism prevailing in the key bargaining rounds at the start of the year. With inflation tracking back towards target the potential for escalating pay pressures in the year ahead shouldn't pose a concern for policymakers." At Jam, chief executive John Morris said the modest rises were an indication of moderate growth in manufacturing; a positive sign that reflected pay freezes in the wider economy.