Two thirds of manufacturers are now freezing pay settlements, according to research by EEF, the manufacturers’ organisation.
This is the highest rate of ‘zero settlements’ since EEF began the survey began in 1987. It also found 16 per cent of pay settlements due in the three months to the end of June were deferred and the average settlement that was agreed fell to 0.7 per cent for the quarter.
May and June individually were bleaker still, with average increases below 0.5 per cent.
David Yeandle is EEF’s head of employment policy, said:
“This unprecedented high percentage of manufacturers freezing pay and the resultant historically low level of average pay settlements are clear signs of the adverse impact that the economic downturn is continuing to have on the manufacturing sector,” he said. “The figures also show that, working with employees and their representatives, manufacturers are trying to manage pay far more flexibly that they have done in previous recessions.”
EEF’s figures are based on 240 settlements, covering over 55,000 employees.