According to a survey of over 200 companies, whilst 30% regarded significant upward pressure on pay as a risk to growth, only 5% of companies regarded it as their most significant risk. The issue ranked fourth behind shortage of raw materials, the financial crisis and access to external finance. In addition, virtually none of the companies surveyed reported a deterioration in workplace relations to be their biggest risk to growth this year.
Separately, EEF’s pay data for the 3 months to the end of December 2011, albeit from a smaller sample of companies, showed the average pay settlement for the period was 2.4%, a figure below the long term settlement average.
The data also shows that pay freezes have remained around 1 in 6 settlements whilst the vast majority of settlements are below 3 per cent. EEF cautioned however that the survey was based on a smaller sample and that next month’s data will be key as it will include settlements for January, the main bargaining month for manufacturing pay settlements.
Commenting on the latest figures, Ms Lee Hopley, EEF Chief Economist, said:-
“Despite increases in the cost of living, pay settlements are continuing to hover around normal levels with a sense of economic realism prevailing. Attention will now turn towards this month’s bargaining round, where negotiations will again take place again a very cloudy outlook for the sector in the year ahead.”
John Morris, Chief Executive of JAM Recruitment, said:
“While pay remains stable, sectors like automotive, aerospace and pharmaceutical are showing promise, and this buoyancy is filtering right down their supply chains. In the North East in particular the skills shortage is especially acute, and exacerbated by the fact that suppliers are also fishing in the same scarce talent pool as the large companies they supply. Manufacturing is one of the few sectors we can be optimistic about but finding the talent it needs in order to fulfil demand remains a key issue.”
|
Settlement level - per cent |
Number of settlements |
|
Pay reduction |
0 |
|
Zero (pay freeze_ |
12 |
|
0.01-2.00 |
15 (1 at 1% exactly and 11 at 2% exactly) |
|
2.01-3.00 |
33 (17 at 3% exactly) |
|
3.01-4.00 |
14 (3 at 4% exactly) |
|
4.01 or more |
2 |
|
|
|
The January 2012 Pay Bulletin contains information on 76 settlements covering 7,876 employees. These figures may be subject to revision to take into account settlements for this period that have not yet been received.