According to figures from EEF, the manufacturers’ organisation, average manufacturing pay settlements for the three months to the end of May have fallen to 0.8%, down from 1.0% for the previous 3 months to the end of April. As recently as last September when the economy turned down sharply in response to the financial crisis, average pay settlements in manufacturing were still running at 3.1%.
EEF’s figures also show the number of companies freezing pay rose slightly to two-thirds of all reported settlements in the same 3 month period, the highest level reported since EEF's survey began in 1987. The number of companies reporting that they had deferred their pay settlement in this 3 month period also increased slightly to just under 13% of all reported settlements.
Commenting on the latest figures, David Yeandle, EEF Head of Employment Policy, said:
“These latest figures demonstrate not just the severity of the downturn since last autumn but the serious efforts that companies have taken to control their costs. Compared to previous recessions this period has also been marked by employees and their representatives working positively with employers to manage pay as a way of helping maintain employment levels.”
Settlement level - per cent
Number of settlements
Pay reduction
3
Zero (pay freeze_
154
0.01-2.00
35 (20 at 2 per cent exactly)
2.01-3.00
26 (10 at 3 per cent exactly)
3.01-4.00
14 ( 3at 4 per cent exactly)
4.01 or more
4
The June 2009 Pay Bulletin contains information on 236 settlements covering 52,280 employees. Of these, the average settlement was 0.8% in March 2009, 0.9% in April 2009 and 0.4% in May 2009 although the figures for both March and May 2009 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.
ENDS