Engineering pay settlements have fallen sharply, to the lowest level for nearly 12 months, according to the latest figures from the EEF (Engineering Employers' Federation). This reduction is believed to reflect the deteriorating trading conditions that much of manufacturing is now facing.
The average settlement for the 3 months to May 2001 was 2.6%, compared to the revised figure for the previous 3 months of 2.9%. In addition, the average figure for the 50 settlements that have so far been reported for May 2001 was only 2.0%, the lowest monthly figure for more than 2 years.
During the last 3 months, the number of pay freezes has increased significantly to nearly 1 in 6 of all reported settlements. In May 2001 alone, more than a third of the reported settlements were pay freezes.
EEF Deputy Director of Employment Policy, David Yeandle, said: "This sharp fall in pay settlements is a clear indicator of how rapidly manufacturing conditions are now deteriorating. It reinforces our view that the MPC will have to give very serious consideration to making a further cut in interest rates in the near future."
The June Pay Bulletin analyses 349 reported settlements affecting 43,304 employees. Of these, the March average was 3.2%, the April average 3.0% and the May average was 2.0%. These figures are liable to revision to take into account settlements not yet received.
