The number of pay freezes in manufacturing has increased following growing uncertainty about the economic outlook and medium-term prospects for demand.
According to the latest survey on pay data from EEF, the manufacturers' organisation, and JAM Recruitment, one in seven companies had frozen pay in the three month period to August. This compares to 1 in 9 for the previous survey for the three months to the end of June.
In addition to the number of freezes, more companies were agreeing lower settlements with one third of settlements below 2% and four fifths below 3%. The average pay settlement for the period was 2.4%, a slight fall from the previous survey of 2.5%.
Commenting on the latest figures, EEF senior economist Andrew Johnson said: "Considerable uncertainty stands in the way of any strong growth in pay in manufacturing, on top of other indicators suggesting demand is softening as eurozone markets and domestic demand remains weak. Government needs a strong plan for growth to offset the ongoing drags on business confidence."
JAM Recruitment chief executive John Morris said that while there were "pockets of confidence" in sectors like aerospace and automotive, this was not the case across the manufacturing sector as a whole.