Manufacturing pay settlements have fallen to their lowest level for more than two years, according to the EEF manufacturers’ organisation.
The average level of settlement for the three months to the end of January 2006 was 2.5%, compared with the previous three-month period of 2.8%, the pay survey of 319 companies showed.
David Yeandle, EEF deputy director of employment policy, said: “These figures clearly demonstrate the extent to which external costs are now biting on manufacturing companies. As a result, they are having to respond to this pressure by managing their controllable costs, such as pay levels, as tightly as possible.”
Nearly one in 10 companies said they had frozen pay in the three months to the end of January 2006, the lowest levels reported since December 2004.
However, the number of companies reporting that they had deferred their pay settlement fell slightly to just under 5% of all settlements.
January is traditionally the month in which the greatest number of pay settlements are reached, the EEF said.