Manufacturing pay deals at record low

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Manufacturing News, Source : TheManufacturer.com
Published : 22 Apr 2002 9:49
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Pay awards in manufacturing firms have fallen to a record low of 2.3 per cent, figures show.

The Confederation of British Industry (CBI) said that settlements in the first three months of the year were 0.6 per cent lower than the previous quarter.

The figure was the lowest for the time of year -the busiest time for manufacturing wage deals - since current records began in 1980, the CBI said.

This means manufactuirng awards are at the lowest level for the time of year since at least 1980. Some 40 per cent of manufacturers reach pay settlements in the first three months of the year.

The business group's survey of 1,400 private sector settlements, the most comprehensive of its kind, showed increases averaged 3.3 per cent in service firms, down from 3.9 per cent in the previous three months.

CBI chief economic adviser said: “This is hard evidence that there is no inflationary pressure. Having settlements in both sectors under control is testimony to the flexibility and dynamism of the labour market as well as cost pressures facing employers.

“With pay increases now so low, we should see some of that heat taken out of consumer spemding, giving the Bank of England the breathing space to hold rates at current levels.”