Pay freezes re-emerge in key bargaining period, EEF/JAM survey finds

According to the latest survey on pay data from EEF, the manufacturers' organisation and JAM Recruitment the average level of pay increase fell slightly to 2.3%, down from 2.4% for the previous three month period to the end of December 2012 and a shade lower than the 2.5% average deal reported a year ago. Furthermore, almost 90% of settlements were agreed at 3% or less. Commenting on the latest figures, EEF chief economist Lee Hopley said the major January pay round in manufacturing had brought few surprises on wage growth, with settlement patterns little changed now for more than two years. "These figures continue to suggest a cautious outlook for many companies, particularly those that continue to operate pay freezes," she added. "While overall pay prospects across the sector look fairly subdued, official figures point to slightly faster earnings growth in manufacturing than the rest of the economy, indicating that the on-going need to attract and retain key skills remains a factor in pay discussions." John Morris, chief executive of JAM Recruitment, said the past two months had seen a higher number of vacancies being advertised in management and senior technical roles such as engineering directors. Second jobbers – those with 3-5 years' experience yet still at the start of their career – were most in demand. "While the latest figures show a slight decrease in the average settlement, we anticipate these trends will put an upwards pressure on pay in the months ahead," he concluded.