Pressure on pay deals continues

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Pay freezes and declining increases continue to be a major feature of pay deals in the engineering sector, according to the EEF.

The manufacturers’ organisation says average settlements fell slightly from 2.4 per cent to 2.3 per cent during the three months to the end of the year and were 0.2 per cent down on the same period in 2011.

Almost 90 per cent of settlements were for pay increases of 3 per cent or less and 12 per cent of settlements involved pay freezes, according to a survey of pay settlements, carried out by the EEF and JAM Recruitment.

EEF regional director Andy Tuscher said: “The major January pay round in manufacturing brings few surprises on wage growth, with settlement patterns little changed now for more than two years.

“These figures continue to suggest a cautious outlook for many companies, particularly those that continue to operate pay freezes.

“While overall pay prospects across the sector look fairly subdued, official figures point to slightly faster earnings growth in manufacturing than the rest of the economy, indicating that the on-going need to attract and retain key skills remains a factor in pay discussions.”