Pay settlements in engineering have remained stable and below long term averages according to the latest study by the manufacturers’ organisation, the EEF, and JAM Recruitment.
The study showed the average pay settlement in engineering was 2.5 per cent for the three months to the end of February.
More than seven out of 10 companies reaching pay deals during the period settled for less than three percent, with more than one in ten agreeing a pay freeze.
The findings back an EEF survey at the start of the year which showed that upward pressure on pay ranked behind raw materials shortages, the financial crisis and access to external finance when manufacturers were asked what was putting their business at most significant risk.
EEF regional director, Andy Tüscher, said: “Pay settlements have remained below long run average levels with a sense of economic realism prevailing in the key bargaining rounds at the start of the year.
“With inflation tracking back towards target the potential for escalating pay pressures in the year ahead shouldn’t pose a concern for policymakers.”
John Morris, chief executive of JAM Recruitment, added: “The fact that modest pay rises are widespread in the sector indicates moderate growth in manufacturing and is certainly a positive sign when one considers the seemingly ubiquitous pay freezes in the wider economy.
“The slight increase in pay rises above three per cent may well be indicative of increased confidence in the industry and recognition of just how important it is to retain talented employees. Any spike in growth for the sector may mean that upwards pressure on wages increases even more in line with demand for manufacturing skills.”