The major pay rounds for most manufacturers (and their employees) are more or less behind us now. And what we can see in 2014 is a very stable picture of pay settlements which are running only very slightly ahead of the average since for most of the past couple of years.
Average pay deals running at 2.6% in the past six months
Source: EEF Pay Bulletin
There has been a great deal of discussion about the relative weakness of pay growth across the economy, even while unemployment has been falling sharply. See here and here.
The trend has been somewhat different in manufacturing with pay growth outpacing inflation and rising more or less with productivity growth over the past year. A couple of other factors are also at play which are not being felt across other sectors of the economy:
- Skills shortages - higher pay increases are necessary to attract and retain key skills
- Catch up from past pay restraint.
- Manufacturing productivity is now growing.