EEF's pay data for the 3 months to the end of January 2009 shows the average level of pay settlements in manufacturing has fallen at an unprecedented rate to 1.8%, down from the revised figure of 2.7% for the previous 3 months to the end of December. This is the lowest figure reported for more than 10 years and is an important indicator as it includes a large number of settlements for January 2009, the main month when settlements are reached in manufacturing.
Further evidence of the severity of the downturn is shown by the sharp rise in the number of companies either freezing or deferring their settlement in the same 3 month period. The number of companies freezing pay nearly doubled to over 40% of all reported settlements, up from just over 20% in the previous 3 months whilst those deferring almost trebled from just over 7% to over 20%. In both cases, these are the highest figures that have been reported for more than 10 years.
In the light of these figures, EEF is continuing to call for the Government to help manufactures retain their skilled workforces by providing some financial assistance for companies introducing short-time working.
Commenting on the latest figures, David Yeandle, EEF Head of Employment Policy, said:
"The scale and speed of the reduction in settlements coupled with the rise in companies freezing or deferring pay demonstrates very starkly the difficult economic conditions in which manufacturers are now operating. However, they also demonstrate that companies are adopting a range of approaches to contain costs, whilst at the same time trying their utmost to retain their skilled workforce. Government needs to support these efforts by providing some financial assistance for companies introducing short-time working."
Settlement level - per cent
Number of settlements
Zero (pay freeze)
123
0.01-2.00
21 (13 at 2 per cent exactly)
2.01-3.00
81 (41 at 3 per cent exactly)
3.01-4.00
42 (15 at 4 per cent exactly)
4.01 or more
19
The February 2009 Pay Bulletin contains information on 286 settlements covering 44,657 employees. Of these, the average settlement was 2.9% in November 2008, 1.8% in December 2008 and 1.6% in January 2009 although the figures for both November and December 2008 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