Wages evading inflationary pressures EEF data shows

But despite a small increase, there continues to be little sign of wage inflationary pressures, says EEF, the manufacturers' organisation that gathers the data. The new figures for the three months to the end of May (including that for April, the second busiest month for settlements) shows that the average pay settlement for the period increased to 2.6%, up from 2.5% for the three months to the end of April 2011. Analysis of the data shows the proportion of settlements agreed at more than 3% continued to drift upwards in the three months to May but, at the other end of the spectrum, one in seven pay deals were pay freezes. Continuing the trend seen through much of the year so far, settlements between 2% and 3% remained the most common. Commenting on these latest figures, EEF chief economist Lee Hopley said: "Despite the continued upward curve of pay settlements, we are only continuing a return to levels we would expect to see in relatively normal economic conditions." While some companies were under pressure to give higher settlements, it was clear that the vast majority were under equal competitive pressure to maintain tight control of their internal costs, she added. John Morris, chief executive of JAM Recruitment, said the average pay settlement was now three times what it was in March 2009 and was climbing towards the 3% mark, suggesting growing strength in the sector. It was a picture borne out by current recruitment trends which show almost a third of manufacturing companies recruiting new employees in the first quarter; a figure that Morris expects to rise as the sector continues to grow.