After falling by almost 1% in the three months to January, EEF's latest pay figures show that although pay growth in manufacturing continued to slow in the three months to February, the pace of decline eased.
The three-month average pay settlement slowed to 1.7% from 1.8%. More than half of pay deals were negotiated below 2%, partly reflecting the sharp decline in RPI inflation which is linked to many wage contracts.
The survey showed a higher proportion of companies froze or deferred wage contracts indicating manufacturers continue to do their utmost to retain skilled workers. We have been stressing for some time that the government must also provide support to help firms hang on to workers, one solution being aid for short-time working.
These calls were echoed by JCB's Chairman who said wage subsidies for workers on short-time working would be "a better way of doing things".