Pay settlements at stable levels says EEF

Only 5% of the 200-plus companies surveyed thought upward pay pressure as their most significant risk although 30% believed it could be some threat to their growth. Shortage of raw materials, the financial crisis and access to external finance were greater risks, respondents said. Virtually none of the companies surveyed regarded deteriorating workplace relations as their most significant risk to growth. Separately, EEF's latest pay data for the three months to the end of December 2011 showed the average pay settlement for the period was 2.4%, a figure below the long term settlement average. The data also shows that pay freezes have remained around 1 in 6 settlements while the vast majority of settlements are below 3%. However, EEF cautioned that the survey was based on a smaller sample and that next month's data would be key as it will include settlements for January, the main bargaining month for manufacturing pay settlements. EEF Chief Economist Lee Hopley said this month's bargaining round would take place against "a very cloudy outlook for the sector in the year ahead". John Morris, Chief Executive of JAM Recruitment, said that while pay remained stable, finding the talent manufacturing needed in order to fulfil demand remained a key issue.