Pay settlements remain constant at 2.4% but upward pressures becoming evident says EEF

Pay settlements in engineering and manufacturing have remained at 2.4% for the 3 months to February 2004 according to the latest figures from EEF, the manufacturers’ organisation. This is the same level as the revised figure for the previous 3 months period.
However, there are now the first signs for some time that the next move may be upwards as the average level of settlements for the months of January 2004 and February 2004 were, respectively, 2.5% and 2.6%. In addition, the number of pay freezes that were reported over the last 3 months fell to just over 1 in 10 of all reported settlements, the lowest figure for more than 2 years.

Commenting on these latest figures, David Yeandle, EEF Deputy Director of Employment Policy, said:-

“These figures show that engineering and manufacturing companies are still keeping a tight rein on their pay budgets. However, there are now the first signs that the combination of the sector’s gradually improving economic environment and a tight labour market will probably soon result in a slight increase in average pay settlement levels”.

Settlement level - per cent

Number of settlements

Zero (pay freeze)

47

0.01-2.00

53 ( 30 settlements at 2 per cent exactly)

2.01-3.00

272 ( 132 at 3 per cent exactly)

3.01-4.00

50 ( 10 at 4 per cent exactly)

4.01-5.00

54 ( 12 at 5 per cent exactly)

5.00 or more

8

Notes for editors

The March 2004 Pay Bulletin analyses 434 settlements in the 3 months to the end of February 2004 affecting 56,667 employees. Of these, the average settlement was 2.1% in December 2003, 2.5% in January 2004 and 2.6% in February 2004 with the figures for both December 2003 and February 2004 based on relatively small samples. These figures may be liable for revision to take into account settlements for this period that have not yet been received.