Pay increases are different by sectors but also by business areas | EEF

Pay increases are different by sectors but also by business areas

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Our new pay bulletin is out! If you are an EEF member you can find it here.

Pay settlements are just a notch higher than last month




Our latest Pay Bulletin showed a 2.6% increase for manufacturing wages in the three-months to October. This is slightly up from last month’s figure, at 2.5%. Overall, the figure has been stable in the last six months after the 2017 pick-up.

In terms of deferrals, summer time data tend to be higher with companies waiting until January to take any decision on settlements.

On the pay freezes side, it’s quite clear that companies are facing a lot of pressure and they may not able not to give any pay rise to their employees. This trend started last year and in the last month touched the lower bound with no companies reporting a pay freeze.

Looking at official data from ONS, manufacturing regular pay was stable at 2.3% for the three-months to September. The small difference between our figures and official ones (in September our data pointed to a 2.5% increase) is probably related to some sample composition effect. Indeed, we tend to have more results in the engineering sectors and few from other manufacturing sub-sectors.


Manufacturing wages path is less stable than the one for the whole economy

If official regular pay growth in manufacturing pointed to 2.3%, figures for the whole economy were up by 3.2% in the three-months to September.

Notably, the difference is not just in terms of growth but also in terms of path followed.




Manufacturing wages accelerated sharply in the second half of 2017 on the back of a very good manufacturing output performance.However, after peaking between the end of 2017 and beginning of 2018, pay has started to slowdown whereas whole economy wages continued to grow steadily. Sector such as construction, distribution & accommodation are seeing big rises in pay but also public wages have received a long-waited increase in June too.


Shop-floor workers got a higher pay rise

For the first time we have produced a more granular analysis on pay settlements across different areas.




As the graph demonstrates, we disaggregated the data looking at pay increases for manual (shop-floor) workers and for those in clerical & administration position (excluding high managerial roles). Some companies do not distinguish between these two categories and they are reported under “both”.

Nonetheless, shop floor workers received a higher pay rise in the last two years, this might be related to the national living wage which increased pressure on lower paid jobs, but also the scarcity of technical skills available on the markets – something that is continuously reported by manufacturers and clearly visible in the vacancies statistics.


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