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Manufacturing pay rises outstrip the wider UK economy

26 August, 2014

The average pay settlement in the UK manufacturing sector during the six months to July was 2.6%, according to figures released by EEF, the manufacturers’ organisation. This contrasts with a 0.2% drop in average weekly earnings for the UK economy as a whole in the three months to June ­– the first fall since 2009.

The EEF survey, which covers 331 companies employing 68,000 people, reveals an increase on last year, when pay settlements averaged out at 2.4%. Furthermore, pay deferments and freezes have continued to fall, with three-month average freezes in July this year running at 6.4%, compared to 14.6% in July 2013.

EEF points out that its survey period includes April, one of the year’s major pay rounds, which is seen as a good indicator for pay this year as a whole.

It adds that its data suggests that manufacturers are rewarding their employees after a difficult economic period of substantial numbers of deferments and freezes. Employers are also countering the effects of skills shortages by paying above-inflation awards to attract and keep key staff.

“After many challenging years, manufacturers are now literally paying their employees back for their support to keep jobs and businesses going,” says Jeff Neild, EEF's national head of employment and industrial relations.

“Business across the sector has clearly been on the up but this new post-recession landscape is, however, presenting employers with a new set of challenges in managing relationships with their employees,” he adds. “Employers need to take practical steps to ensure they are fully up to speed with managing trade union dynamics in an effective way.”

•   To help employers to manage effective relationships with their employees in the post-recession landscape, EEF is running a conference called Managing Employee Relations at five locations across the UK during November.

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