Prices hold down manufacturing pay rises

Manufacturers are blaming low pay deals on a prices squeeze, according to a CBI survey.

Pay awards averaged 2.7 per cent in the three months to October 2000. This is down on the 3 per cent in the three months to July.

In the service sector, however, pay awards averaged 3.7 per cent in the same period.

“Manufacturing firms report that low profits and the inability to increase prices are the main constraints on pay settlements. Service firms have managed to keep their pay awards stable despite rising pressure for increases, caused by increases in the cost of living,” said the CBI’s chief economist Kate Barker.

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www.cbi.org.uk

By Mike Broad