Manufacturing salaries set to rise with economic recovery

Posted on 28 Mar 2014 by Victoria Fitzgerald

Workers in the sector are predicted to benefit from economic recovery with fatter pay packets, according to a recent report on wage data from the EEF manufacturers' organisation.

The survey of nearly 250 wage settlements of 40,000 employees revealed agreements of 2.6% in recent months, compared with a pay settlement average of 2.4% in 2013.

Ms Lee Hopley, Chief Economist at EEF, says: “We’re by no means out of the woods yet, but there’s plenty to suggest that we’re on the right path. Pay settlements seem to be stabilising at a level that is both affordable and higher than last year. This is another good indication that the green shoots of recovery are firmly taking root and the pressure on household budgets, at least for manufacturing employees, is starting to unwind.

“Manufacturing continues to be a driving force and this also reflects in the growth of pay where the sector is outpacing the rest of the economy. Put simply, workers in the sector are reaping the rewards of recovery earlier than others. Hopefully this level of confidence will continue as manufacturers carry on picking up pace.”

The report also revealed the proportion of pay freezes has stabilised at 5%, its lowest level since August 2008. Additionally, proportions of smaller settlements have dropped with 26% at less than 2%. Pay deferrals have remained stable at 4%.

The news comes after the EEF reported manufacturers were optimistic with firms boasting growth thanks to solid UK sales and a boost in overseas trade.