The combination of relatively low pay settlements and a rising number of deferred agreements illustrates the tougher economic conditions currently facing manufacturers, according to the latest figures from EEF, the manufacturers’ organisation.
EEF’s latest figures for the three months to the end of June 2008 show that the average level of pay settlements in the sector was 3.1 per cent, the same level as the revised figure for the previous three months to the end of May.
However, the number of companies reporting that they had deferred their pay settlement rose to just over seven per cent of all settlements, the highest level reported since December 2002. In the same period, the number of companies reporting pay freezes fell slightly to 6.5 per cent of all settlements.
Peter O’Grady, head of representation for EEF West Midlands, said: "The relatively low level of pay settlements, together with the rise in the number of companies deferring their agreements, confirms the tougher economic climate.
"In this more difficult business environment, manufacturers are using their experience of managing previous downturns to do all they can to contain costs."
Eighteen companies agreed to a pay freeze, while 13 agreed to a rise of between 0.01 and two per cent. The vast majority of firms (117) agreed to below inflation rises of between 2.01 and three per cent, while 93 agreed claims of between 3.01 and four per cent. Thirty eight firms agreed rises above four per cent.
The July Pay Bulletin contains information on 279 settlements covering 53,038 employees. Of these, the average settlement was 3.1 per cent in April 2008, 2.7 per cent in May 2008 and 3.3 per cent in June 2008 although the figures for both May and June are based on very small samples. These figures may be subject to revision to take into account settlements for this period that have not yet been received.
EEF West Midlands is the largest employers’ association in the region, representing primarily engineering, manufacturing and technology-based organisations.