Manufacturing pay settlements fall to record low

Pay data for the three months to the end of February shows that the average level of pay settlements in manufacturing has fallen slightly to 1.7%, down from 1.8% for the previous three months to the end of January. This is the lowest figure reported since EEF's survey began in 1987. This evidence is reinforced by the slight rise in the number of companies either freezing pay or deferring their pay settlement in the same three month period. The number of companies reporting that they had frozen pay rose slightly to nearly 45% of all reported settlements whilst those deferring their pay settlement also increased slightly to just over 20%. In both cases, these are also the highest figures that have been reported since the survey began in 1987. In the light of these figures, EEF is reiterating its call for the Government to help manufacturers retain their skilled workforces by providing some financial assistance for the increasing number of manufacturers that have now introduced short-time working. EEF head of employment policy David Yeandle said: "This further fall in settlement levels and increase in the number of companies either freezing or deferring pay clearly shows the severe impact that the economic downturn is now having on manufacturers. Government needs to support the growing number of companies that have introduced short-time working as one way of coping with these difficult times by providing them with some financial assistance."