Manufacturing pay settlements fall to historic low

The data, from the manufacturers' organisation EEF shows that for the three months to the end of August, the average level of pay settlements has fallen very sharply to 0.3%, down from 0.8% 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 three months to the end of July last year, the average settlement level was 3.2%, illustrating the extent to which companies have had to respond to the severe economic conditions. 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 the survey began. However, the number of manufacturers reporting that they had deferred their pay settlement fell slightly to just over 13% in this period. EEF head of employment policy David Yeandle (pictured) said: "This further 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 and, the need for companies to respond, there are no signs that this pattern will change in the near future."