Manufacturing pay settlements fall

According to EEF’s latest monthly survey, the average level of settlement reached in the 3 months to the end of January 2007 was 2.9%, down from the revised figure for the previous 3 month period to the end of December of 3.2%. These figures are significant as they include over 250 settlements for the month of January alone, the main bargaining period for manufacturing. EEF’s view that fears about increased pay pressure have been overblown was also backed by the fact that the number of companies reporting that they had frozen pay rose sharply in the same period to around 1 in 12 of all settlements, the highest figure since August 2005. The number of companies reporting that they had deferred their pay settlement also rose slightly to just under 4% of all settlements, the highest figure since December 2005. Commenting on these latest figures, David Yeandle, EEF deputy director of employment policy, says: “This significant fall in the key month for manufacturing pay settlements demonstrates that the MPC should not be concerned about wage inflationary pressures building up in manufacturing.” Settlement level – percent Number of settlements Zero (pay freeze) 26 0.01-2.00 20 (19 at 2% exactly) 2.01-3.00 167 (105 at 3% exactly) 3.01-4.00 83 (16 at 4% exactly) 4.00 or more 16