The data will provide relief to manufacturing companies readying themselves for widespread demands for wage increases.
The survey data, gathered from 200 companies for the three months to the end of February, show the average pay settlement for the period was 2.5% – a figure that comes in below the long-term settlement average of 3%.
Pay freezes have also fallen to around one in 10 settlements, while the overwhelming majority of settlements continue to come in at below 3%.
At the start of the year, EEF released a survey indicating that even though 30% of the surveyed manufacturers regarded upward pressure on pay as a risk to their firm’s growth, only 5% regarded it as the most important risk to their business. The survey released today backs up the findings of this survey – payment settlements ranked fourth; behind access to raw materials, the financial crisis and access to finance.
Commenting on the latest figures, Ms Lee Hopley, chief economist at EEF, said: “A sense of economic realism [has prevailed] 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, echoed Ms Hopley’s optimism and commented: “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.”