Manufacturing pay awards remain low

awards have slipped slightly in manufacturing firms and have barely changed in
the service sector, according to the latest survey of pay awards published
today by the CBI.          

the three months to October, pay settlements averaged 2.3 per cent among
manufacturing firms, compared with 2.6 per cent in the previous quarter and 2.8
per cent in the same quarter last year.   

sector settlements averaged 3.7 per cent in the three months to October,
compared with 3.6 per cent in the previous quarter. In the three months to
October 2001, they averaged 3.2 per cent.                                                              

chief economist, Ian McCafferty, said: "Pay restraint is very much in
evidence in this survey. In an intensely competitive environment, private
sector firms are having to keep costs under tight control. Prices and profits
continue to be severely squeezed. Manufacturers, and others exposed to the
global economic weakness, are under particular pressure."                           

said inability to increase prices was the main factor keeping pay awards down.
It was mentioned by 43 per cent of respondents, closely followed by low
profits, referred to by 40 per cent.

two main factors pushing up awards were the rising cost of living, mentioned by
21 per cent, and the need to recruit and retain staff, mentioned by 20 per

service sector firms, the cost of living was the most frequently mentioned
downward pressure with 24 per cent of respondents saying it was very important.
The second most common factor was low profits, cited by 21 per cent of

main factor pushing up awards in the service sector was the need to recruit and
retain staff.    

By Ben Willmott

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